Consumer sentiment drops for the fifth month as inflation fears mount

US consumer sentiment declined 2.7% in May to 50.8, marking the second-lowest reading in the 75-year University of Michigan survey history.

Since January, sentiment has plunged nearly 30%.

The drop surprised economists. The majority of consumers are increasingly worried about rising inflation.

The sentiment among Democrats hit a record low of 33.9, while the Republicans’ index dropped to 84.2, down from 90.2 in April.

Consumers expect inflation to rise 7.3%, which is the highest since 1981 and is up from an expectation of 6.5% last month.

However, despite the sentiment, actual inflation is down to 2.3%, the lowest level in over four years.