US consumer sentiment hits early Ukraine war lows
Consumer sentiment in the United States has been hit by the Ukraine war and it once again dipped to lows it had only reached with the start of the war in question.
US consumer sentiment is nearing March lows once again in light of surging inflation exacerbated by the Ukraine war, which is heavily affecting the buying decisions of Americans, a consumer server conducted by the University of Michigan (UMich) said.
"The final May reading confirmed the early month decline in consumer sentiment, which … reverted to virtually the same level of sentiment seen in March," University of Michigan Surveys of Consumers Director Joanne Hsu said.
The final May reading for UMich's Consumer Sentiment Index was 58.4, a steep decrease from April's 65.2 and a slight one from March's level of 59.4.
The developments of the Ukraine war prompted oil prices, as well as those of other commodities, to hit multi-year highs by the first week of March due to supply disruptions.
The developments earned concerns from consumers across the world, including those in the United States, and the reduction in consumer spending caused by the war-induced supply disruptions has weighed on the US economy as it is 70% made up by consumer expenditure.
According to Hsu, consumer sentiment has been hit mainly by negative views on current buying conditions for houses and durables, not to mention the pessimistic outlook for the economy due to inflation and other factors.
"A stable outlook for personal finances may currently support consumer spending," Hsu said. "Still, persistently negative views of the economy may come to dominate personal factors in influencing consumer behavior in the future."
US home mortgages grew at their slowest since April 2019, and data that came out Thursday from the federal home loan agency Freddie Mac reinforced the notion that rising mortgage rates and other ownership costs have started curbing the vibrant US housing market.
Mortgages growing slowly comes after data from the Commerce Department showed monthly sales of newly-built homes hit their two-year low in April.
Previously, the National Association of Home Builders reported that home building sentiment - a gauge of domestic construction activity - also hit two-year lows in its early survey for May.
The US and its allies, in light of the Ukraine war, have rolled out comprehensive sanctions, including restrictions on the Russian central bank, export control measures, SWIFT cutoff for select banks, and closure of airspace to all Russian flights. Many of their companies have suspended their Russian operations.
The actions taken by the West gravely stunted the economy and global trade, all in all, causing several crises and sparking concerns over a worldwide food shortage.