Consumer sentiment rises to 97.7 in May while partisan divide narrows

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 recent stability in consumer sentiment, however, masks two important underlying shifts in the components as well as in the partisan divide. More favorable income gains and low inflation meant that consumers held the most favorable 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.

Home buying conditions were viewed less favorably, but were offset by the most favorable views about home selling in more than a decade.

The partisan difference in the Expectations Index is still huge, but the gap between Democrats and Republicans narrowed slightly to 55 Index points from 65 three months ago, mainly due to Democrats expressing diminished fears of an immediate recession and lessened concerns about personal financial setbacks.