At least it wasn’t revised lower.

The final read on University of Michigan sentiment for May was 69.1, lackluster to be sure, but a marginal improvement from this month’s disastrous preliminary reading.

The month-to-month decline, 10%, still counts as the biggest percentage drop since headline sentiment notched a record low in mid-2022, when the Fed upped the ante to 75bps hike increments in the battle to arrest a generational inflation surge.

As the figure above shows, the 1.7ppt upward revision from the preliminary reading counts as meaningful, which is to say it’s pronounced. Still, May’s drop pushed the headline gauge to the lowest in five months.

Survey director Joanne Hsu said Friday that consumer spending now faces “multiple” risks. Americans were “particular[ly] concern[ed] over labor markets,” she said. “They expect unemployment rates to rise and income growth to slow.”

That’s a bad combination: Fewer jobs and slower pay growth. On the bright side, waning demand (i.e., a diminished consumption impulse) might help bring down inflation which, in turn, could allay consumers’ worries around higher rates, which were also evident in Friday’s update.

Notably, year-ahead inflation expectations were 3.3% in the final read for May. The preliminary release saw that series print 3.5%. So, Friday’s release saw sentiment revised meaningfully higher and near-term inflation expectations lower. Good news, if only at the margins.