(Reuters) - U.S. consumer sentiment unexpectedly dropped in early May as inflation worries sapped confidence in what had been a rapidly brightening economic outlook, a key survey showed on Friday.
The University of Michigan's Consumer Sentiment Index fell 5.5 points to a reading of 82.8, pulling back from the highest level in roughly a year in April. Economists polled by Reuters had been looking for a reading of 90.4, which would have marked the third straight monthly gain.
Consumers' assessment of their current situation and their future outlook both soured, while their estimates for inflation shot up to 4.6% for this year and to 3.1% for the next 5 years - the highest in more than a decade for both.
"The average of net price mentions for buying conditions for homes, vehicles, and household durables were more negative than any time since the end of the last inflationary era in 1980," Richard Curtin, the survey's chief economist, said in a statement.