The numbers: Rising inflation has cast a shadow over the U.S. economic recovery as Americans pay higher prices for a variety of goods and services ranging from steaks to used cars to plane tickets, according to a closely followed consumer survey.
The second and final reading of the consumer sentiment index edged up a tick to 82.9 from an initial 82.8, the University of Michigan said Friday. But it was still down sharply from a 13-month high of 88.3 in April.
All three major surveys of consumer confidence fell in May owing to worries about higher prices.
Big picture: For the first time in arguably decades inflation is on the minds of everyone from Main Street to Wall Street to Washington. Prices are soaring after years of hardly any inflation.
The Federal Reserve, the nation's inflation watchdog, insists prices will come back down once the economy has mostly recovered from the coronavirus pandemic and pentup demand is satisfied.
The process could take a year or more to play out, though, and keep the debate over inflation raging.
Key details: The surprise decline in consumer sentiment in May was triggered by sudden worries about inflation. Consumer prices have surged this year and jumped more than 4% in the past 12 months -- a 13-year high.
Americans are paying more for virtually everything: groceries, gas, appliances, sporting goods, used vehicles, auto insurance, vacation rentals and so on. That's eating away at their paychecks and some of their hefty savings.
The result: The attitude of Americans right now about their personal finances and broader economy is somewhat subdued despite a huge decline in coronavirus cases. The so-called index of current conditions declined to 89.4 in May from 97.2 in April.
Consumers were also uncertain about what the next six months would bring. The expectation index slipped to 78.8 this month from 82.7 in April.
What they are saying? "Record proportions of consumers reported higher prices across a wide range of discretionary purchases, including homes, vehicles, and household durables,' said Richard Curtin, chief economist of the survey.
Market reaction: The Dow Jones Industrial Average and S&P rose in Friday trades. Stocks held onto gains after the sentiment results.
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