U.S. Final May Michigan CSI - Unusually large downward revision as inflation expectations accelerate
The final May Michigan CSI of 44.8 is an unusually sharp downward revision from the preliminary 48.2 and down further from April’s 49.8 as well as a fresh record low. It appears that consumer patience over finding a resolution to the Middle East conflict is exhausted.
Current conditions have been revised down by 2.0 points to 45.8 while expectations have been revised down by 4.4 points to 44.1, though on the month the decline in the former at 6.7 points is steeper than that of the latter at 4.0 points.
This is the third straight monthly decline in the composite, current conditions and expectations.
Inflation expectations have been revised higher, the 1-year view to 4.8% from 4.5% and the 5-10 year view to 3.9% from 3.4%. It is unusual to see the 5-10 year view move by more than the 1-year.
The 1-year view is the highest since September 2025 and the 5-10 year view the highest since June 2025. The levels are high enough to worry the Fed if still below their post-tariff highs of 2025.