Consumer sentiment about the U.S. economy has ticked down but remains near a recent high, with Americans’ outlook largely unchanged this year. The University of Michigan’s consumer sentiment index, released Friday in a preliminary version, slipped to 77.9 this month, down from March’s figure of 79.4. Sentiment is about halfway between its all-time low, reached in June 2022 when inflation peaked, and its pre-pandemic averages.
Quick Read
- Consumer Sentiment Decline: The University of Michigan’s consumer sentiment index dropped to 77.9 in April from 79.4 in March, indicating a slight decrease in consumer confidence about the U.S. economy.
- Historical Context: The current sentiment level is midway between its all-time low in June 2022, during peak inflation, and its average before the pandemic.
- Economic Uncertainty: Consumers are hesitant to form definitive opinions about the economic future due to the upcoming election, which they believe could significantly influence economic direction.
- Impact of Gas Prices: A recent increase in gas prices, with the national average rising 7% over the past month to $3.63 per gallon, has negatively affected consumer outlook.
- Inflation Expectations: Although slightly elevated, consumer expectations for inflation have risen to 3.1% for the coming year, still above the Federal Reserve’s target of 2% but below the current 3.5% rate.
The Associated Press has the story:
US consumer sentiment falls slightly as outlook for inflation worsens
Newslooks- WASHINGTON (AP) —
Consumer sentiment about the U.S. economy has ticked down but remains near a recent high, with Americans’ outlook largely unchanged this year.
The University of Michigan’s consumer sentiment index, released Friday in a preliminary version, slipped to 77.9 this month, down from March’s figure of 79.4. Sentiment is about halfway between its all-time low, reached in June 2022 when inflation peaked, and its pre-pandemic averages.
“Consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy,” said Joanne Hsu, director of the consumer survey.
An increase in gas prices likely contributed to the decline in consumers’ outlook, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics. The average national price of a gallon of gas has jumped about 7% from a month ago, according to AAA, to $3.63 a gallon.
Americans’ perceptions of future inflation also edged up, probably reflecting still-elevated prices. Consumers expect inflation to be 3.1% a year from now, which would exceed the Federal Reserve’s 2% target. Still, that would be below the current level of 3.5%.
