Consumer Sentiment Falls in May on Recession, Debt Ceiling Standoff Worries – By Tim Smart (US News) / May 12, 2023
The political infighting over the debt limit appears to have spooked consumers.
Consumers appear concerned about the political standoff over the debt ceiling now underway in Washington, prompting a sharp drop in sentiment in May, according to the preliminary estimate from the University of Michigan released on Friday.
The overall index fell 9.1% to 57.7 from April’s reading of 63.5. That was way below expectations of a small decline. The current conditions index fell to 64.5 from April’s 68.2 while the expectations index fell to 53.4 from 63.5, an 11.7% drop.
“While current incoming macroeconomic data show no sign of recession, consumers’ worries about the economy escalated in May alongside the proliferation of negative news about the economy, including the debt crisis standoff,” said survey director Joanne Hsu. “But with the job market remaining strong and incomes rising, albeit faced with inflation, consumers have maintained their spending habits.”
