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US consumer sentiment tumbled further in May as the impacts of President Trump's tariff policies remained top of mind for Americans.
The latest University of Michigan survey released Friday showed sentiment hit its second-lowest reading on record. The index slid to a reading of 50.8, below the 52.2 seen last month and the 53.4 expected by economists. The reading was just shy of the all-time low of 50 seen in June 2022.
"Uncertainty over trade policy continues to dominate consumers' thinking about the economy," Survey of Consumers director Joanne Hsu wrote in the release. Hsu added that nearly 75% of respondents mentioned tariffs "spontaneously," up from almost 60% in April.
Read more: What Trump's tariffs mean for the economy and your wallet
Pessimism over the inflation outlook soared again as one-year inflation expectations jumped to 7.3% — the highest since 1981 — from 6.5% the month prior. Just four months ago, consumers had expected inflation of 3.3% over the next year.
Long-run inflation expectations, which track expectations over the next five to 10 years, also climbed, hitting 4.6% in May, up from 4.4% in April.
"One gets the sense that the American household is under rising stress and this survey captures what is clearly an elevated discontent of the consumer," RSM chief economist Joe Brusuelas wrote following the release.
Read more: April inflation breakdown: Food, shelter, and medical care pinch consumers' wallets
The preliminary sentiment reading surveyed consumers from April 22 to May 13, meaning just two days of responses came after the US and China agreed to a 90-day tariff pause. That news had contributed to a massive stock market rally earlier in the week, with both the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) officially erasing all the losses seen following the initial April 2 tariff announcements.
Hsu noted that "many survey measures" showed some signs of improvement in the two days following the latest tariff pause but were too small to change the overall picture.
"The final release for May will reveal the extent to which the May 12 pause on some China tariffs leads consumers to update their expectations," Hsu said.
The next University of Michigan consumer sentiment survey will be released on May 26.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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