With the "mini war" still ongoing (albeit with a 'ceasefire' in place), expectations were for UMich consumer sentiment to continue languishing at record lows in final May data released this morning.

And it did, with the headline sentiment - along with both Current Conditions and Expectations - all plunging to record lows...

Source: Bloomberg

Yep... Americans have never been more miserable... Black Friday, meh; 9/11, nothingburger; GFC, fleshwound...

“The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month,’’ Joanne Hsu, director of the survey, said in a statement.

So far, consumer spending has proved resilient as the job market holds up and a stock-market rally bolsters wealth.

“Critically, consumers appear worried that inflation will increase and proliferate beyond fuel prices, even in the long run,” Hsu said.

Consumers expect prices to rise an annualized 3.9% over the next five to 10 years, up from 3.5% in April and the highest in seven months. They also saw costs advancing 4.8% over the next year.

This month’s increase in long-run expectations reflects sizable jumps among independents and Republicans.

For the latter group, long-run inflation expectations are currently more than double their February 2025 reading on a monthly basis.

Republicans' confidence overall is starting to fade...

Finally, here's the k-shaped economy writ large...

Stocks at record highs (thanks to AI CapEx dreams) while sentiment at record lows (thanks to inflationary pressures on low income consumers - among other things)...

This divergence is ultimately unsustainable.