US consumer sentiment index edges down in May

Published: May 26, 2018 15:11:00 | Updated: May 28, 2018 15:25:31

US consumer sentiment index was 98.0 in May, barely below the 98.8 in April and just above the 97.1 in last May's survey, according to the University of Michigan (UM) Surveys of Consumers.

The current conditions index slipped to 111.8 in May, down from 114.9 in April, and nearly identical to last May's 111.7. The Expectations Index was 89.1, up from 88.4 in April and last year's 87.7.

The long-awaited rise in wages was still absent in the May survey, as consumers anticipated just 1.6-per cent gains in household incomes, down from April's 2.2 per cent and last year's 2 per cent.

Those under age 45 anticipated income gains of 3.5 per cent and those with incomes in the top third expected income gains of 3.2 per cent; all other subgroups were under 2.0 per cent.

The majority of consumers, 51 per cent, expected the unemployment rate to stabilise at its current 18-year low; while equal proportions of consumers, 24 per cent, expected some minor increases or minor declines in the year ahead.

Favourable views of buying conditions fell slightly for household durables, vehicles and homes.

Net price references were the least favourable for household durables since just prior to the Great Recession, for vehicles since 1997, and for homes since 2006.

Rather than prices or interest rates, consumers have increasingly cited greater certainty about their future jobs and income as the underlying reason for advancing their purchases, reports Xinhua.

Since the election of US President Donald Trump, the Sentiment Index has meandered in a tight eight-point range from 93.4 to 101.4, with the small month-to-month variations indicating no emerging trend, said UM economist Richard Curtin, director of the surveys.

The Surveys of Consumers is a rotating panel survey based on a nationally representative sample that gives each household in the coterminous US an equal probability of being selected.

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