Preliminary results show consumer sentiment fell 6.2 points in April to 50.8, down 26.4 points from one year ago, according to preliminary results of the University of Michigan Surveys of Consumers. The Current Economic Conditions Index decreased 7.3 points from the previous month to 56.5, 22.5 points lower than year-ago-levels. The Consumer Expectations Index decreased 5.4 points to 47.2, 28.8 points lower than the April 2024 Index.
“Consumer sentiment fell for the fourth straight month, plunging 11% from March. This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region, and political affiliation. Sentiment has now lost more than 30% since December 2024 amid growing worries about trade war developments that have oscillated over the course of the year. Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate this month. The share of consumers expecting unemployment to rise in the year ahead increased for the fifth consecutive month and is now more than double the November 2024 reading and the highest since 2009. This lack of labor market confidence lies in sharp contrast to the past several years, when robust spending was supported primarily by strong labor markets and incomes. Note that interviews for this release were conducted between March 25 and April 8, closing prior to the April 9 tariff partial reversal”, said University of Michigan Surveys of Consumers Director Joanne Hsu.
Year-ahead inflation expectations surged from 5.0% last month to 6.7% this month, the highest reading since 1981 and marking four consecutive months of unusually large increases of 0.5 percentage points or more. This month’s rise was seen across all three political affiliations. Long-run inflation expectations climbed from 4.1% in March to 4.4% in April, reflecting a particularly large jump among independents.
Read the University of Michigan Surveys of Consumers release.
