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Consumer sentiment in the US dropped to 50.8 in May, the second lowest on record, primarily due to concerns about tariffs and their impact on inflation. Year-ahead inflation expectations rose to 7.3%, up from 6.5% in April. Nearly three-quarters of consumers spontaneously mentioned tariffs, highlighting trade policy uncertainty as a major economic concern. While a 90-day pause on some US-China tariffs was announced, economists generally agree tariffs could lead to short-term price increases, though the long-term effects remain unclear. A final consumer sentiment index will be released on May 30th.

Prepared by Christopher Adams and reviewed by editorial team.