Amid ongoing trade policy uncertainty and fears of inflation, U.S. consumer sentiment declined for the fourth consecutive month in April, according to the latest data from the University of Michigan Surveys of Consumers. The Consumer Sentiment Index fell to 52.2 this month, down from 57.0 in March, as consumers expressed anxiety about the potential economic impacts of tariffs.
Director of Surveys of Consumers, Joanne Hsu, highlighted that consumers are perceiving risks across various aspects of the economy, particularly due to trade policy uncertainties and the looming threat of inflation. Labor market expectations remained pessimistic, with concerns over weaker income growth in the coming year.
Inflation expectations among consumers showed a slight decrease to 6.5% for the next 12 months, although still significantly elevated compared to historical trends. This decline followed a partial pause in tariff increases on April 9, but inflation expectations remained persistently high compared to March. Long-term inflation expectations also rose to 4.4%, primarily driven by Independents.
The fluctuations in consumer sentiment and inflation expectations reflect the delicate balance of economic factors at play, with trade tensions and inflationary pressures continuing to weigh on consumer outlook. As uncertainties persist, consumers are bracing for potential economic challenges ahead, further underscoring the fragility of the current economic landscape.