Consumer sentiment in the U.S. edged higher to 73.3 in May versus 72.2 in April, the Thomson Reuters/University of Michigan survey of consumers showed on Friday, May 14, in line with economists’ forecasts and largely unchanged since September 2009′s reading of 73.5.
The survey’s preliminary results for May showed one-year inflation expectations at their highest since June 2009. Consumers in May expected inflation to rise 3.1% over the next year, while April expectations came in at 2.9%. The five-to-10-year inflation measure rose to 2.9% from 2.7%.
A lack of price discounts discouraged consumers from making purchases, but the overall level of buying attitudes for household durables remains well above the year-earlier readings, according to Richard Curtin, director of the surveys.
The surveys’ expectations index rose slightly to 68.3 from 66.5, while consumers’ view of current economic conditions increased to 81.1 at the beginning of May from 81.0 in April, slightly below the 81.9 forecast.
“The latter is heavily influenced by the pace of layoffs, so with jobless claims more or less stable in recent months, the index is at exactly the same level as in January,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics in Valhalla, N.Y.
“Expectations are more volatile and susceptible to moves in stock prices, with a short lag, so we expect a clear decline in the June survey and perhaps in the final report for May,” Shepherdson added. “Either way, the index is consistent with very weak consumption, rising at a year-over-year rate of just 1% or so.”
The index of consumers’ 12-month economic outlook rose to 84 in early May from 80 in April.