US consumer sentiment drops in May

WASHINGTON (AP) — A weak U.S. economy pulled down consumer sentiment in May.

The University of Michigan says its index of consumer sentiment dropped to 90.7 from 95.9 in April. The May reading was the lowest since November.

Consumers of all ages and income levels were gloomier this month. And they were less confident both about current economic conditions and the future. But Richard Curtin, chief economist of the surveys, noted that the index has averaged 94.6 the first five months of 2015, highest since 2004.

On Tuesday, the Conference Board, a business group, reported that its measure of consumer spirits showed modest improvement in May. Its consumer confidence index rose to 95.4 from 94.3 in April. The Conference Board credited an improved job market: Employers added a healthy 223,000 jobs in March, up from an unimpressive 85,000 in March. And unemployment tumbled to 5.4 percent last month, lowest since May 2008.

Still, consumers have reasons to be cautious about the economy and their own financial wellbeing.

The Commerce Department reported Friday that the U.S. economy fell at a 0.7 percent annual pace the first three months of the year, hurt by severe winter weather and a widening trade deficit. And gasoline prices have been rising after hitting a low of $2.03 a gallon in late January. Prices at the pump are up to $2.74 a gallon from $2.56 a gallon a month ago, according to AAA.

The Michigan index still stands well above May 2014’s 81.9. Despite the May dip, most economists say consumers’ mood remains consistent with healthy spending.

“We continue to look for a pickup in consumption over the next two months,” Barclays Research economist Jesse Hurwitz wrote in a research note.

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