A measure of U.S. consumer sentiment fell in April, with inflation concerns continuing to weigh on Americans’ views of the economy, according to the preliminary results of a survey released Friday by the University of Michigan. The report cited consumer concerns over inflation, unemployment, and interest rates, alongside geopolitical events.
The University of Michigan’s Surveys of Consumers index registered a preliminary reading of 77.9 for April, a decrease from the final March reading of 79.4. While this marks the first decline in four months, the index remains 22% higher than it was in April 2023. The survey’s findings are based on interviews with a national sample of households and are used as an indicator of future consumer spending.
The report detailed changes in its component indexes. The Current Economic Conditions Index, which measures consumers’ perceptions of their personal finances and business conditions, fell to 79.3 from 82.5 in March. The Index of Consumer Expectations, which reflects consumers’ outlook for the future, was largely unchanged, registering 77.0 compared to 77.4 the previous month.
A key component of the survey, consumers’ inflation expectations, showed a slight increase. The outlook for year-ahead inflation rose to 3.1% in April, up from 2.9% in March. Long-run inflation expectations, which track a five-year outlook, also increased to 3.0% from 2.8% the prior month. These figures are monitored by economists and policymakers, including the Federal Reserve.
In the official release accompanying the data, Surveys of Consumers Director Joanne Hsu commented on the findings. “Sentiment has been remarkably stable during a period of fairly substantial uncertainty, as consumers have reserved judgment,” Hsu stated.
Hsu’s statement also noted the factors influencing consumer views. “For the last two months, consumers have expressed a variety of concerns, including those about the wars in Gaza and Ukraine. It is not clear, however, that these concerns will have a substantial negative effect on the economic outlook,” she said.
The report indicated that sentiment remains divided along political party lines, a trend that has persisted in recent years. The University of Michigan will release its final, revised data for the April consumer sentiment survey at the end of the month.
