U.S. consumer sentiment faltered in late May, outlook dimmed

U.S. consumer sentiment faltered in late May as Americans became increasingly pessimistic on the economic outlook even as business reopenings and benefit payments lifted spirits about the current situation.

The University of Michigan’s final sentiment index for the month fell to 72.3 from a preliminary reading of 73.7, according to data Friday. That compared with 71.8 at the end of April.

The median estimate in a Bloomberg survey of economists called for the May final index to edge up to 74.

The measure of current conditions was 82.3 following a preliminary reading of 83 -- though still up from April’s 74.3 -- while the expectations index declined to 65.9, the lowest since 2013, from a preliminary 67.7 and the prior month’s 70.1.

Federal payments distributed under the CARES Act are giving a jolt to consumers’ finances -- though the bump may be temporary as some of the stimulus money includes one-time checks.

And while the worst of the economic downturn may be over, Americans are expecting prolonged hardship, according to the report.

The 50 per cent of consumers who expected “bad financial times over the next five years” was the second-worst reading since Donald Trump became president, Richard Curtin, director of the survey, said in a statement.

Personal income posted a record 10.5 per cent increase in April on the unprecedented payout of government social benefits, though consumer spending plunged by a record 13.6 per cent, data from the Commerce Department showed Friday.

The Michigan survey was conducted April 22 to May 26, and the preliminary results’ cutoff was May 13.