Iran war drives inflation concerns US consumer confidence drops to record low

On May 22, affected by the war in Iran, the U.S. consumer confidence index fell to a record low in May, and long-term inflation expectations deteriorated significantly. The final May value released by the University of Michigan on Friday showed consumer confidence fell to 44.8 from 49.8 in April. This data is not only lower than all market expectations, but also lower than the initial value of 48.2. The survey covers survey responses from April 21 to May 18. Consumers expect prices to rise at an annualized rate of 3.9% over the next five to 10 years, up from 3.5% in April and reaching a seven-month high. Consumers also expect prices to rise by 4.8% in the coming year. Gasoline prices are hovering near highs since 2022, exacerbating American concerns about the cost of living and unease about the protracted end of the war. The impact of inflation on household budgets, especially on low-income consumers, poses a risk to consumption prospects. "The cost of living remains the top concern, with 57% of consumers voluntarily mentioning that high prices are eroding personal finances, up from 50% last month," survey leader Joanne Hsu said in a statement.