Consumer Sentiment Falls To A Record Low, Consumers Cite Gasoline And Tariffs

Please consider the University of Michigan Preliminary Consumer Sentiment Survey for May 2026.

Consumer sentiment was essentially unchanged this month, coming in a scant 1.6 index points below April’s reading and comparable to the trough reached in June 2022. [It’s nearly 2 points below the then record low in 2022] While the expectations index inched up, current conditions fell back about 9%, owing to a surge in concerns about high prices both for personal finances as well as buying conditions for major purchases. Real income expectations continued a decline that began in March. About one-third of consumers spontaneously mentioned gasoline prices and about 30% mentioned tariffs. Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump. Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.
Year-ahead inflation expectations softened a touch from 4.7% last month to 4.5% this month. The current reading still substantially exceeds the 3.4% reading seen in February prior to the start of the Iran war, along with all 2024 readings and the 2.3-3.0% range seen in the two years pre-pandemic. Long-run inflation expectations inched down from 3.5% in April to 3.4% in May. In 2024, values ranged between 2.8% and 3.2%, while in 2019-2020, they were consistently below 2.8%.

Gasoline was not surprising. But I found it interesting that nearly a third blame tariffs.

Tariffs are killing jobs and raising prices but mainstream media seldom portrays it that way.

Current Conditions vs Expectations