The expectations subindex rose to 89.5 from 88.4 in April while the gauge for current condtions fell to 113.3 from 114.9. Inflation expectations for the year ahead edged up to 2.8 percent from 2.7 percent. The 5-year outlook for inflation was unchanged at 2.5 percent.
The data will thus provide some additional points for both sides in the debate about the timing and number of future interest rate hikes. Eight-in-ten consumers anticipated interest rate hikes during the year ahead, and fewer consumers anticipated further declines in the unemployment rate--although all of the shift was toward the expectation of a stable unemployment rate rather than an increased rate. Consumers have a remarkable track record for anticipating changes in the actual unemployment rate, as shown in the accompanying chart. Overall, the data are consistent with a growth rate of 2.7% in real personal consumption from the second half of 2018 to first half of 2019.