Consumer Sentiment Slips in May on Concern Over Wages

Julio Cortez/AP NEW YORK -- A monthly gauge of U.S. consumer sentiment fell in May as a gloomy view on income growth clouded an otherwise positive economic outlook, a survey released Friday showed. The Thomson Reuters/University of Michigan's preliminary May reading on the overall index on consumer sentiment came in at 81.8, down from 84.1 the month before. It was also below the expectation of 84.5 among economists polled by Reuters. "The main concern behind the small May loss involved dispiriting trends in wages," survey director Richard Curtin said in a statement, as the median gain in household income for the next year was seen below inflation expectations. However, Curtin said, "consumers judged the current state of the economy at the most favorable levels in 10 years." Some 58 percent of consumers reported that the economy had improved, up from 49 percent in April. The May proportion matched two readings from 2013 as the highest going back to 2004. The survey's barometer of current economic conditions fell to 95.1 from 98.7 and below a forecast of 99. The gauge of consumer expectations slipped to 73.2 from 74.7 and fell short of an expected 75. The survey's one-year inflation expectation remained unchanged from last month at 3.2 percent, while the survey's five-to-10-year inflation outlook dipped to 2.8 percent from 2.9 percent.