American consumers entered May in a deeply pessimistic mood, with sentiment hovering near record lows and trust in nearly every major financial institution continuing to deteriorate, according to two reports released on Friday by the University of Michigan.

The preliminary May Index of Consumer Sentiment came in at 48.2, below analysts' forecast of 49.5 and slightly below April's final reading of 49.8. The result keeps sentiment near its weakest levels in decades.

"Consumer sentiment was essentially unchanged this month, coming in a scant 1.6 index points below April's reading and comparable to the trough reached in June 2022," survey director Joanne Hsu wrote.

Current conditions fell by roughly 9 percent, driven by a surge in concerns over prices affecting both personal finances and big-ticket purchases, while real income expectations extended a decline that began in March.

Cost pressures dominated consumers' concerns. About one-third of respondents mentioned gasoline prices, while roughly 30 percent cited tariffs.

One gallon of regular gasoline averaged $4.54 nationwide on Friday, up nearly 40 cents from a month earlier and $1.40 higher than a year ago, according to AAA.

"Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump," Hsu wrote. "Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall."

A companion report, Confidence in Financial Institutions, added a darker institutional dimension to the picture.

The survey found that confidence in the Federal Reserve has fallen, with 55 percent saying they have less confidence now — back to levels comparable to 2023, when inflation peaked, reversing a partial recovery seen at the start of 2025.

The report noted that the data was gathered against a backdrop of "soaring gas prices, concerns about a resurgence of inflation, and continued threats to Fed independence as Jerome Powell's term as chair comes to a close".

Insurance companies remain the least trusted institutions by a substantial margin, with a net confidence score of minus 54.

"This is consistent with rising insurance costs in a number of domains that have added to consumers' mounting frustration with the persistence of high prices," the report said. "This year, credit unions are the only financial institutions with net positive confidence readings, again stronger than those seen in 2023."