Last Update: 21-May-15 17:41 ET
- The University of Michigan Consumer Sentiment Index declined to 88.6 in the preliminary May reading from 95.9 in April. The Briefing.com Consensus expected the index to increase to 96.0.
- That is the lowest reading since October 2014 when the index hit 86.9.
- The Expectations Index fell to 81.5 in May from 88.8 in April. The Current Conditions Index declined to 99.8 from 107.0.
- The decline in sentiment was likely caused by increasing gasoline prices and a highly volatile stock market, which offset improvements in labor market conditions.
- The steep drop in consumer sentiment is unlikely to have any impact on consumer spending. Spending growth relies on income growth. As long as the labor market continues to improve and income trends higher, consumption growth should follow.
- Consumer sentiment has little influence on consumption. As long as payroll levels continue to expand, the resulting income growth should keep consumption gains steady regardless of the monthly ebbs and flows in sentiment.