Americans Feel Worse About Economy as Gas Prices Stay High

Americans are feeling more pessimistic about the economy than ever before, according to new data from the University of Michigan.

The consumer sentiment index (a measure of how people feel about the economy) dropped to 48.2 in May — the lowest reading ever recorded. When this number goes down, it means people are worried about their financial future.

Why are people so worried? • High gasoline prices are eating into family budgets • Credit card spending has slowed down sharply • Both wealthy and low-income Americans are cutting back on purchases • Political divisions are affecting how people view the economy

The survey revealed interesting political differences. Republicans feel more negative about the economy than at any time since President Trump's 2024 election. Meanwhile, Democrats showed slightly more optimism, though still at low levels.

Bank of America reported that credit card spending dropped significantly in early May across all income groups. This suggests that expensive gas is forcing everyone — rich and poor — to spend less on other things.

When consumer sentiment (how people feel about the economy) is this low, it often means people will spend less money in the coming months. This could slow down the entire economy if the trend continues.

This is an AI-generated summary. Read the original article at: https://www.marketwatch.com/story/gloom-deepens-for-consumers-in-early-may-due-to-high-gas-prices-e20e31ae?mod=mw_rss_topstories