UMich sentiment falls to 44.8; 1-year inflation expectations hit 4.8%

44.8 is the market signal from the May final University of Michigan consumer survey. The index fell from 49.8 in April and from the 48.2 preliminary May reading, putting sentiment below the prior June 2022 trough. The University of Michigan Survey Research Center tied the third straight monthly decline to Strait of Hormuz supply disruptions, higher gasoline prices, and broader cost-of-living pressure.

The Surveys of Consumers final table shows a 10.0% month-over-month decline and a 14.2% year-over-year drop in the headline index. Current Economic Conditions fell to 45.8 from 52.5 in April, a 12.8% monthly decline. The Expectations Index dropped to 44.1 from 48.1, down 8.3% from April and 7.9% from May 2025.

The inflation-expectations line is why this release clears the macro threshold. One-year inflation expectations edged up to 4.8% from 4.7% in April and stand 1.4 percentage points above the 3.4% reading from February 2026, before the Iran conflict began. Long-run inflation expectations rose to 3.9% from 3.5% in April, above the 2.8% to 3.2% range recorded through 2024.

Survey director Joanne Hsu said cost of living remained a first-order concern, with 57% of consumers voluntarily saying high prices were eroding personal finances, up from 50% in April. Nearly 40% of respondents mentioned gasoline prices during interviews, up from 33% last month, which links the household data directly to the energy shock.

The next checkpoint is the preliminary June release at 10 a.m. ET on June 12. If long-run inflation expectations stay near 4% or move higher, the Federal Reserve’s policy discussion will have to weigh weaker household sentiment against the risk that inflation expectations are becoming less anchored.

Not investment advice. Verify all figures with primary sources before acting.