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Consumer sentiment falls in May as Americans’ inflation expectations jump after tariffs

  • The University of Michigan's consumer sentiment index fell to 50.8 in May 2025, marking the fifth consecutive monthly decline and the lowest level since June 2022.
  • The decline followed concerns about the Trump administration's high import tariffs, which many Americans worry will slow growth and increase prices.
  • Sentiment among Democrats reached 33.9, the lowest since 1980, while Republicans' sentiment dropped to 84.2, the lowest since Trump's election, partly amid recent tariff reductions.
  • Consumers now expect inflation to rise to 7.3% in the next 12 months, the highest since 1981, up from 6.5% last month, while five-year inflation expectations hit 4.6%, the highest since 1991.
  • Federal Reserve Chair Jerome Powell called the inflation expectations an outlier but noted these worries could lead to higher wages and prices, complicating monetary policy decisions.
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The Business Journals broke the news in United States on Thursday, May 15, 2025.
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