May’s consumer confidence plunged to an all-time low despite strong stock markets and spending data, raising questions about the index’s accuracy.
The University of Michigan’s Consumer Sentiment Index fell to 44.8 in May, its lowest level since the survey began in 1952. The reading undercuts previous lows during the COVID-19 pandemic, post-pandemic inflation, and the Great Recession, signaling extreme pessimism among consumers.
The index, a key economic indicator, contrasts sharply with other data showing record stock market highs and robust consumer spending. Analysts suggest the disparity may stem from methodological issues or a disconnect between sentiment and actual economic activity.
Markets have largely shrugged off the weak confidence print, focusing instead on resilient economic fundamentals and corporate earnings growth.