Consumers remain largely confident about the economy, even as a sharp political divide among respondents continues, according to a report Friday.
The University of Michigan said its final reading of consumer sentiment was 97.1 in May, compared with April's final reading of 97 and May's initial reading of 97.7. It is up 2.5% from May 2016.
Continue Reading Below
Economists surveyed by The Wall Street Journal had expected a May final reading of 97.5.
The index reflecting consumers' sentiment on current economic conditions rose 1.6% to 111.7 from last May. The index of expectations rose 3.3% from a year ago to 87.7.
The recent rise in optimism, which saw a boost after President Donald Trump's election in November, reflects a turnaround from consumers' attitudes in October, when sentiment had matched a two-year low.
The Federal Reserve in March voted to raise short-term interest rates, and it is expected to push for additional rate increases if economic conditions continue to improve.
As in recent months, the survey also showed continued widespread disagreement about future U.S. economic prospects along political party lines, with Democrats expecting a recession and Republicans expecting robust economic growth.
Richard Curtin, the survey's chief economist, said respondents are expressing their policy preferences through their expected economic outcomes.
"Consumer sentiment has continued to move along the high plateau established following Trump's election," Mr. Curtin said. "While extremes may well narrow, it is unlikely that the impact of partisanship on economic expectations will disappear."
Inflation expectations, a measure closely watched by the Fed, remained largely steady. In the May survey, consumers said they expect inflation of 2.6% in the coming 12 months, up from 2.5% in the month before. They expect 2.4% inflation in the coming five years, matching their April expectations.
Write to Austen Hufford at email@example.com
(END) Dow Jones Newswires
May 26, 2017 10:48 ET (14:48 GMT)