US consumer sentiment dropped to a near-record low in May, falling 2.7% to 50.8, the second-lowest level in 75 years. This decline, surprising economists, is attributed to growing concerns about inflation fueled by President Trump's trade war. While some trade tensions have eased, the impact on prices remains a concern, particularly with Walmart announcing price hikes. Consumers expect inflation to reach 7.3% in the next year, the highest since 1981, impacting sentiment and potentially influencing the Federal Reserve's interest rate decisions. Political divisions also heavily influence consumer outlooks.

Prepared by Christopher Adams and reviewed by editorial team.