U.S. Consumer Sentiment Falls to 44.8 as April Wholesale Inflation Hits 6%
Updated
Updated · The Motley Fool · May 24
U.S. Consumer Sentiment Falls to 44.8 as April Wholesale Inflation Hits 6%
8 articles · Updated · The Motley Fool · May 24
The University of Michigan’s consumer sentiment index fell to 44.8 in May, its lowest reading since records began in 1952 and a third straight monthly decline.
High prices and worsening inflation expectations drove the drop, while April producer-price inflation climbed to 6%—the highest since 2022—with core PPI at 5.2%.
Energy costs tied to the U.S.-Iran conflict were the main trigger, and higher transportation and warehousing costs are now spreading those pressures through the broader economy.
That combination threatens consumer spending, which makes up about 70% of U.S. GDP, and could weaken corporate earnings if businesses face slower demand and higher costs.
The warning lands as the S&P 500 is up 9% this year and trades at 21.1 times forward earnings, leaving stocks vulnerable if inflation stays hot and profit forecasts are cut.
Why are Americans still spending robustly when their economic sentiment has hit an all-time low?
Can AI's record earnings continue to propel the stock market as consumer pessimism and high inflation grow?
With wholesale inflation soaring, are current corporate earnings forecasts dangerously optimistic for the near future?
May 2026 Inflation Shock: U.S. Faces 3.8% CPI Rise, Low Consumer Sentiment, and Political Fallout
Overview
In May 2026, U.S. consumer sentiment remains low even as the stock market hits record highs, because most Americans feel they are just 'treading water.' Many have already spent their tax refunds or seen them absorbed by persistent price increases. The wealth from rising stocks is mostly locked in retirement accounts, offering little relief for daily expenses. Inflation is proving sticky and is accelerating, with oil prices staying high due to ongoing conflict in the Middle East. This has led to higher costs for essentials, making it harder for consumers to feel financially secure despite a strong economy on paper.