University of Michigan’s consumer sentiment final May reading fell to 90.7 compared with a final April reading of 95.9. The data released Friday indicates the U.S. economy has contracted during Q1 2015.
According to the University of Michigan, “Consumer optimism retreated in May as consumers adopted more modest prospects for a rebound following the economy’s dismal 1st quarter performance.”
Since January when consumer sentiment hit its highest level since 2004, sentiment has continued to cool off. Consumers continue to hold back on spending as concerns remain over job security and income growth.
Even though unemployment rate levels have been dropping for years, workers continue to see weak wage growth. Wages are failing to keep up with economic needs of Americans. Many families are reluctant to heat up spending on big ticket items such as homes and cars, until wage growth is heated up. The break consumers felt from the short-lived lower gas prices is losing steam as the price at the pump continues to steadily rise again.
Richard Curtin, chief economist for consumer sentiment survey said, “Price perceptions for a wide range of goods have grown less positive despite low overall inflation.”
The report showed that the gauge of consumers’ views on current conditions fell to 100.8 during May from 107 in April, while a barometer of consumer expectations fell to 84.2 from 88.8.
Investigators for Congress - the U.S. Government Accountability Office (GAO) - recently reported that contingent workers - workers without permanent jobs - have seen their share of the total labor force grow in recent years. The GAO said this group of workers tend to earn less than others and are less likely to have access to benefits.
Contributed by Millennium Traders
Sections
Categories