Consumer mood buckles under high gas prices

CHICAGO (Reuters) – Consumer optimism in the United States buckled in May to its lowest since Hurricane Katrina, a survey showed on Friday, hit by $3 per gallon gasoline, rising mortgage interest rates and a souring political climate.

Earlier, the government offered some positive news on the economy as the U.S. trade deficit narrowed unexpectedly in March based on a surge in export demand — but rising import prices kept alive jitters about inflation.

The University of Michigan’s closely-watched sentiment survey slumped to 79.0 in May from April’s final 87.4, far below the median Wall Street forecast for a reading of 86.1.

The report stirred worries that many Americans will stay away from the shopping malls over the next few months as they spend more to fill up their cars — although the link between consumer sentiment and actual spending is often tenuous.

Reuters