U.S. consumer sentiment fell sharply in April, marking the fourth consecutive monthly decline and reaching its lowest level since July 2022. The University of Michigan’s Consumer Sentiment Index dropped to 52.2, down from 57.0 in March, reflecting widespread anxiety about economic policy, inflation, and trade tensions. Expectations for the future deteriorated further, with the index for future outlooks reaching its lowest point since 1980. Inflation expectations for the coming year surged to 6.5%, the highest since 1981, driven by concerns over tariffs and trade policy changes. Labor market outlooks also worsened, with nearly two-thirds of consumers expecting higher unemployment and fewer than half anticipating income growth in the year ahead.
Key Takeaways:
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Consumer sentiment and future expectations both plunged, with the latter at its lowest since 1980.
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Inflation expectations soared to their highest level in over four decades, fueled by tariff and trade policy worries.
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Most consumers expect rising unemployment and weaker income growth, signaling potential challenges for future economic activity.
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