The final
reading for the April Reuters/Michigan index of consumer sentiment came in at 52.2
compared to the flash reading of 50.8 and the March final reading of 57.0. That was the lowest reading since July 2022 (51.5).
Economists
had foreseen the indicator to stay unrevised at 50.8
The details of
the latest Surveys of Consumers of the University of Michigan revealed that the
index of current economic conditions plunged by 6.3 per cent m-o-m to 59.8 this
month (the lowest level since December 2022 (59.4)), while the index of
consumer expectations tumbled by 10.1 per cent m-o-m to 47.3 (the lowest level
since July 2022 (47.3)).
The survey also
showed that the year-ahead inflation expectations jumped from 5.0 per cent in March to 6.5 per cent in April, compared
to the preliminary reading of 6.7 per cent. That was the highest reading since
1981. Meanwhile,
the 5-year inflation expectations climbed from 4.1 per cent in March
to 4.4 per cent, matching the preliminary reading. That represented the highest print since
June 1991.
Commenting on
the latest results, Joanne Hsu, Surveys of Consumers Director, noted that consumers
perceived risks to multiple aspects of the economy, in large part due to
ongoing uncertainty around trade policy and the potential for a resurgence of
inflation looming ahead. “Labor market expectations remained bleak,” she added.
“Even more concerning for the path of the economy, consumers anticipated weaker
income growth for themselves in the year ahead. Without reliably strong
incomes, spending is unlikely to remain strong amid the numerous warnings signs
perceived by consumers.”