Consumer sentiment improves in May

After a two-month freefall, consumer sentiment on the economy improved slightly in early May as some states began to reopen their economies and the spread of the coronavirus slowed, a closely followed survey showed.

The preliminary reading of the consumer-sentiment survey in May edged up to 73.7 from 71.8 in April, the University of Michigan said Friday. Economists had forecast a small decline.

Americans were less confident about their own finances, but a massive infusion of federal aid in the form of stimulus checks, extra unemployment benefits and contributions to the salaries paid by small businesses helped lift their spirits.

What happened: Even in the face of the worst economic crisis in almost a century, consumer sentiment is still hovering well above its record low of 55.3 in 2008.

Federal aid, low interest rates and widespread price discounting have made it easler for households to weather the storm early on, though it’s unclear how long that will last.

A portion of the sentiment survey that examines how Americans view the present rose to 83 points from 74.3. Yet another part of the survey that gauges attitudes for the next six months slipped again to 67.7 from 70.1.

Consumers were still more worried about the threat to their health from COVID-19 than the pandemic’s damage to their financial well-being, but they grew more concerned about the “social isolation” that’s resulted from the stay-at-home orders and government-ordered shutdowns.