The Survey of Consumers, a closely-watched gauge of consumer sentiment, came in slightly below consensus but still high at 97.1 in May. The median consensus reading was 97.6.
“Consumer sentiment has continued to move along the high plateau established following Trump’s election,” Richard Curtain, chief economist for the Survey of Consumers said. “The final May figure was virtually unchanged from either earlier in May or the April reading. Indeed, the May figure was nearly identical with the December to May average of 97.3.”
However, hyper-partisanship is still weighing down economic potential.
“Despite the expected bounce back in spending in the current quarter, personal consumption is expected to advance by 2.3% in 2017,” Curtain said, adding “although this is based on averages across the political divide, which has never been as extreme as it is currently.
The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending. The data indicate real consumer spending will advance by 2.7% in 2017, though the forecast is for it to be uneven.
Final Consumer Sentiment Results: May 2017
|Index of Consumer Sentiment||97.1||97.0||94.7||+0.1%||+2.5%|
|Current Economic Conditions||111.7||112.7||109.9||-0.9%||+1.6%|
|Index of Consumer Expectations||87.7||87.0||84.9||+0.8%||+3.3%|