American consumer confidence plummeted to an unprecedented low in May, driven by soaring gasoline prices linked to the conflict with Iran, which intensified anxieties over the escalating cost of living.
The University of Michigan's Surveys of Consumers reported that its Consumer Sentiment Index fell to a final reading of 44.8, an all-time low. This figure is down from 48.2 earlier in the month and 49.8 in April, significantly missing Reuters economists' forecasts for the index to remain unchanged at 48.2.
"The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month," stated Joanne Hsu, director of the Surveys of Consumers. The survey also noted a decline in sentiment among Independents and Republicans, with both groups registering their lowest readings under the current presidential administration.
Further compounding concerns, the survey's measure of consumer expectations for inflation over the next year edged up to 4.8% from 4.7% in April. Longer-term inflation expectations also rose sharply, with consumers anticipating a 3.9% increase over the next five years, up from 3.5% last month.
This poll comes days after a separate survey from Fox News showed President Donald Trump's performance among Republicans has led to his approval rating falling to a record low as the Iran war continues to drive price increases. The survey, conducted by the Trump-friendly conservative news network, found a seven-point rise in the number of self-identified GOP voters who now say they disapprove of Trump's handling of the economy, with just 36 percent of non-MAGA GOP respondents saying they approve of his economic record compared with 74 percent of MAGA Republicans who say they approve. But the supermajority of MAGA voters who still back his handling of the economy still wasn't enough to keep his approval rating on the issue from plummeting to just 29 percent — a full 5 percent lower than what the same poll recorded a month ago.
