Consumer sentiment is now down 10% from a month ago and more than 14% from a year ago.

This is the third straight month that consumer sentiment has fallen amid disruptions in oil supply from the Strait of Hormuz that have caused oil and gasoline prices to rise and have added further to the dissatisfaction that consumers are feeling with affordability.

“The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month,” said Joanne Hsu, the survey director.

“Lower-income consumers and those without college degrees posted particularly strong sentiment declines; these groups are more sensitive to increases in the cost of gas and other essentials,” she added.

Inflation, gauged by the most closely watched consumer price index, spiked 0.5 percentage points to 3.8% for the year ending in April. The inflation reading for April was the highest since May 2023. In March alone, prices rose 0.9%.

In May, sentiment declined for both Republicans and independents, dropping to the lowest level of President Donald Trump’s second term.

Inflation expectations also increased, a sign consumers think the higher energy prices could end up filtering into the broader inflation landscape.

Year-ahead inflation expectations ticked from 4.7% last month to 4.8% in May, while long-run inflation expectations jumped from 3.5% in April to 3.9% this month.

“If the survey asked are you having fun yet, the resounding answer would come back a loud and clear negative,” said Chris Rupkey, chief economist at FWDBONDS.

The record low sentiment reading comes even as other economic indicators are more positive.

For instance, unemployment is low. At 4.3% in April, the unemployment rate is below where it was for much of the 1990s and 2000s.

The stock market has also performed well.

“The stock market record highs are having no effect whatsoever on cheering consumers up, which means most Americans have the money locked up in 401K retirement accounts that cannot be drawn on to make life easier now,” Rupkey said.

One obvious reason that sentiment might be depressed is that, even though inflation has subsided in recent months, households have not yet adjusted and are still suffering from the high price level caused by the recent major inflation bout.

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“We know sentiment and behavior aren’t always well aligned and that misalignment has occurred, perhaps more so in recent years, but the sentiment reflects a number of things that are very real,” Mark Hamrick, senior economic analyst at Bankrate, recently told the Washington Examiner.

For example, prices are up about 25% from January 2020, a massive change that families have yet to absorb.