Americans’ fears of rising inflation are weighing on consumer sentiment, adding to concerns about how quickly the US economy will be able to recover from the pandemic.

The University of Michigan’s consumer sentiment survey fell to 82.8 in May, down from 88.3 in April, as consumers’ attitudes about current and future conditions weakened. That compared to expectations for the closely watched gauge to rise to 90.4, according a Reuters poll of economists.

The decline in sentiment comes as a surprise — the rapid vaccine rollout in the US, a further reopening of the economy and the distribution of stimulus cheques had all been expected to boost consumer confidence.

“Consumers have started to feel the pinch of inflation and they are concerned that the decades-long period of low inflation that we have experienced is over,” said Thomas Simons, money market economist at Jefferies.

Survey respondents characterised buying conditions for homes, cars and long-lasting household items as the most negative “since the end of the last inflationary era in 1980”, said Richard Curtin, chief economist of the consumer surveys.

Data released earlier this week showed that consumer prices had advanced at a rate of 4.2 per cent in the 12 months to April, the biggest increase since 2008. That rise has fuelled concerns that the US economy is overheating as activity ramps up.

James Knightley, economist at ING, said that the recent outage at the Colonial pipeline — a critical artery delivering liquid fuels from oil refineries to states along the US eastern seaboard, which was shuttered for five days by a cyber attack — and subsequent petrol price rises and panic-buying may also have “played a part”.

The Federal Reserve has repeatedly cautioned that any increase in inflation would be temporary, though rising prices pose a challenge for policymakers as they continue to shore up the economy with massive fiscal and monetary stimulus.

Investors could hear about the emergence of higher consumer price expectations from a string of Fed officials who are scheduled to speak next week. Messaging from policymakers will also be crucial in coming months.

The decline in consumer sentiment followed a report from the commerce department that showed retail sales unexpectedly stalled last month following a strong surge in March, which had been fuelled by stimulus cheques and the easing of lockdown restrictions.

Sales at clothing, sporting goods, hobby and book stores and online sales all declined last month. Purchases of cars and car parts and electronics increased, and spending at bars and restaurants rose 3 per cent, signalling a shift in spending from goods to services.

Still, some economists predict the strongest increase in consumer spending this year since 1946.

“Importantly, consumer spending will still advance despite higher prices due to pent-up demand and record saving balances,” Curtin said.

“This combination of persistent demand in the face of rising prices creates the potential for an inflationary psychology, fostering buy-in-advance rationales and cost-of-living increases in wages,” he added.