The final May report on consumer sentiment from the University of Michigan put consumer sentiment at 52.2, up from the preliminary 50.8 and flat from 52.2 in April, but down from 57.0 in March and 64.7 in February.

Expectations for the final May figure called for an uptick to 52.0, based on the easing in tariff worries after President Trump suspended many of his sweeping tariff plans.

One-year inflation expectations moderated to 6.6 percent in the final May report from a scary 7.3 percent in the preliminary May reading, and were not that much different from 6.5 percent in April though way up from 5.0 in March. May's modest rise in inflation expectations marked the end of a four-month run of frightening monthly increases from 2.8 percent in December.

Forecasters see the index at 52.0 in the final May report versus a low-low 50.8 in the preliminary report for May.

The University of Michigan's Consumer Survey Center questions households each month on their assessment of current conditions and expectations of future conditions. Preliminary estimates for a month are released at mid-month and are based on about 420 respondents. Final estimates are released near the end of the month and are based on about 600 respondents.

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer sentiment index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.