Consumer confidence in the United States rebounds in May, while long-term inflation expectations decline.

In late May, consumer confidence in the United States rebounded, shaking off the record low levels seen earlier in the month. At the same time, consumers' expectations of long-term inflation also eased, reflecting a reduction in concerns about the economic outlook after the temporary reduction of some import tariffs between China and the United States. According to data released by the University of Michigan, the final consumer confidence index for May was 52.2, slightly higher than the initial value of 50.8 at the beginning of the month, and unchanged from April. Although this level still remains historically low, it is better than the 51.5 predicted by economists surveyed by Bloomberg. The survey also showed that consumers are becoming more optimistic about long-term inflation. People expect the average annual inflation rate for the next five to ten years to be 4.2%, lower than April's 4.4%, marking the first decline this year. Expectations for price increases in the next year are 6.6%, slightly higher than last month's 6.5%, but significantly lower than the initial value of 7.3%. The survey was conducted until May 26, a few weeks after the United States and China reached an agreement to temporarily reduce tariffs on some imported goods. The trade policies of the Trump administration had previously heightened consumer concerns about the economy, impacting overall economic activity. However, despite some recovery in confidence, consumers still express worries about the future. Joanne Hsu, director of the University of Michigan's Consumer Survey, pointed out, "Although consumer confidence weakened in early May, sentiment improved towards the end of the month with the temporary cessation of tariffs on Chinese products. Consumers believe that the current economic outlook is not worse than last month, but they still feel quite concerned about the future." Additionally, data released earlier by the U.S. government on Friday showed that personal spending, adjusted for inflation, had modestly increased in April, with inflation levels remaining moderate. Nevertheless, the University of Michigan's survey also indicates that consumers' income expectations remain weak, with continued concerns about the risk of unemployment. The current personal financial condition index has decreased compared to last month, reaching its lowest level since 2009. Looking at the sub-indexes, the "Future Expectations Index" for May rose from 47.3 in April to 47.9, marking the first increase since November last year; while the "Current Conditions Index" fell to its lowest level since the end of 2022. It is worth noting that the improvement in consumer confidence this month is mainly due to a change in attitude among politically independent individuals and Democratic supporters, while the confidence level of Republican supporters has declined.