The University of Michigan’s preliminary sentiment index for May plunged to 88.6, the lowest since October, from 95.9 the prior month.
It was weaker than even the lowest estimate of 68 economists surveyed by Bloomberg. Another report showed factory production stalled in April.
News that the world’s largest economy sputtered last quarter, combined with uneven employment gains, shook households this month, raising concerns that spending will be slow to pick up. A strong dollar and weak oil prices also are holding back manufacturing, further denting the likelihood of a quick rebound in the rate of expansion.
“It’s not very encouraging for growth prospects,” said Millan Mulraine, deputy head of U.S. research & strategy at TD Securities USA in New York, who projected a drop in confidence. “The spate of numbers has been quite weak.”