U.S. May Final Michigan CSI - Reduced tariffs on China appear to have eased concerns
May’s Final Michigan CSI has seen inflation expectations coming down significantly, no longer significantly accelerating from April, probably due to reduced tariffs on China. However the boost to sentiment is modest, the final figure of 52.2 up from a preliminary 50.8 and unchanged from April.
The 5-10 year inflation expectation of 4.2% is down from 4.4% in April and well below a 4.6% preliminary view. The 1-year view of 6.6% is marginally up from 6.5% in April but well below the preliminary 7.3%.
The preliminary survey was conducted largely before the reduction in tariffs on China was announced. The court ruling against tariffs is unlikely to have had much impact on the data yet, but could in June, depending on developments.
The upward revision to the Michigan CSI was similar by component, current conditions to 58.9 from 57.6 and expectations to 47.9 from 46.5, though current conditions are down from 59.8 in April and expectations are up from 47.3 in April.
