US consumer sentiment improves in May

Consumer sentiment in the US improved in May, according to preliminary figures from the University of Michigan.

The index of consumer sentiment rose to 97.7 from 97.0 in April and 94.6 in May 2016. Economists had been expecting an unchanged reading of 97.0.

The current economic conditions index printed at 112.7, unchanged from the previous month and ahead of May 2016's reading of 109.9.

Meanwhile, the index of consumer expectations increased to 88.1 in May from 87.0 in April and 84.9 in May of last year.

Surveys of Consumers chief economist, Richard Curtin, said: “Consumer sentiment remained on the high plateau established following Trump's election, with the early May figure nearly identical with the December to May average of 97.4. The Trump bump was relatively small given that the sentiment index averaged 91.8 in the comparable six month period a year ago and 94.5 in the same period two years ago.

"The recent stability in consumer sentiment, however, masks two important underlying shifts in the components as well as in the partisan divide. More favourable income gains and low inflation meant that consumers held the most favourable real income expectations in a dozen years. Buying plans, however, were mixed: household durables rose to a decade peak, while vehicle buying conditions slipped to a three year low."