US Consumer Confidence Hits Record Low for Two Consecutive Months

U.S. consumer confidence continues to deteriorate, with the latest data showing a drop to an all-time low, as inflationary pressures and surging oil prices are eroding household financial conditions, posing a threat to U.S. consumer spending.

According to Bloomberg, the University of Michigan consumer sentiment index for May fell to 48.2 from 49.8 in April, with expectations at 49.5. The survey responses were collected from April 21st to May 4th.

At the same time, the sub-index measuring current economic conditions fell to 47.8, the lowest level ever recorded, and consumer assessments of personal financial conditions also slipped to the worst level since 2009.

Consumer inflation expectations remain high. The expected price increase for the next year is 4.5%, and the long-term inflation expectation for the next five to ten years is 3.4%.

Survey director Joanne Hsu stated in a declaration that about one-third of the respondents spontaneously mentioned gasoline prices, and about 30% mentioned tariff issues, "Consumers continue to feel the impact of cost pressures, with the surge in oil prices being the main driving factor."

Oil Prices Hit Two-Year High, Cost Pressure Concentrated Eruption

Data from the American Automobile Association (AAA) shows that this week, the average price of gasoline across the U.S. broke through $4.50 per gallon for the first time since July 2022, with an increase of more than 50% since the Iran war outbreak.

The continuous rise in oil prices directly pushes up household daily expenses, becoming the core variable in this round of consumer confidence decline.

Consumer assessments of current buying conditions fell to a five-month low, and assessments of personal financial conditions dropped to the lowest level in sixteen years. This series of indicators point to the reality of increasing pressure on household budgets and exert downward pressure on the prospects of retail and consumer-related industries.

Employment Data Provides Partial Support, Expected Index Rises Slightly

Despite the overall weakness in consumer confidence, labor market data provides some offsetting support.

The April non-farm employment report released by the government showed that 115,000 jobs were added last month, exceeding market expectations and continuing the strong momentum from March, making the two-month combined increase the strongest since 2024.

The expected sub-index in the confidence index rose for the first time since January, showing that some consumers still retain confidence in the future economic outlook. However, whether this recovery can continue largely depends on whether inflation and oil prices can experience substantial relief."