Preliminary May Michigan Consumer Index Drops

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he University of Michigan's preliminary consumer sentiment index for May dropped to 85.3, from 87.7 in April, to its lowest level in two years.

May would be the fourth straight month in which the index has declined. Analysts had projected the index to be between 86 and 93, Bloomberg reported Friday.

The consumer expectations index, based on optimism about the next one to five years, declined to 73.7, the lowest since March 2003, from 77.

The university's index of current conditions, which reflects Americans’ perceptions of their financial situation and whether it's a good time to make big purchases, also fell, to 103.3 from 104.4 in April.

The preliminary index is based on a phone survey of about 300 households. The final report for the month, due June 1, will reflect about 500 responses.