Consumer Sentiment Comes In Under Consensus

A downgrade in the current assessment pulled down the final May reading for consumer sentiment to 98.0 which is 8 tenths lower than the May flash and a full point under Econoday's consensus. Current conditions fell to 111.8 vs 113.3 at mid-month and down from 114.9 in April. The decline hints at weakness for May's job market and in turn for May's consumer spending as well. Expectations also eased, to 89.1 from 89.5 at mid-month and 88.4 from April. This declines hints at less confidence in the jobs and income outlook.

Inflation expectations are flat, at 2.8 percent for the year-ahead outlook and 2.5 percent for the 5-year. Both are unchanged from mid-month but the former is up 1 tenth from April.

The decline in consumer sentiment does match a topping off in the weekly consumer comfort index and will lower expectations for next week's consumer confidence report. Yet confidence, even if slipping, still remains historically high.