US Consumer Sentiment Sinks to Near Record Low in April/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. consumer sentiment dropped for the fourth consecutive month in April, driven by inflation fears and economic uncertainty. The Michigan Consumer Sentiment Index fell to 52.2, marking one of its lowest levels since the 1980s and a 32% drop year-over-year.
Consumer Sentiment Declines Again: Quick Looks
- Sentiment Falls Again: The Michigan Consumer Sentiment Index dropped to 52.2 in April, down 8.4% from March.
- Historical Lows: Sentiment is now at the 1st percentile of all monthly readings since 1978.
- Biggest Yearly Decline Since 2022: The index has fallen 32.4% year-over-year.
- Expectations Plunge: The Consumer Expectations Index hit 47.3 — its lowest point since 1980.
- Inflation Fears Soar: Year-ahead inflation expectations jumped to 6.5%, the highest since 1981.
- Spending Outlook Dims: Consumers see weak income growth ahead, raising concerns about future consumer spending.
- Broad Impact: Declines in sentiment span all demographics, with middle-income households especially impacted.
US Consumer Sentiment Sinks to Near Record Low in April
Deep Look
Consumer sentiment in the United States continues to falter, falling sharply in April for the fourth straight month amid persistent inflation anxiety and broad economic unease. The University of Michigan’s Consumer Sentiment Index, a key gauge of how Americans view their financial health and the broader economy, dropped to 52.2 — one of the lowest readings in its nearly five-decade history.
The 8.4% month-over-month drop (a 4.8-point decline) was slightly less severe than economists had feared, narrowly beating expectations of 50.8. Yet compared to April 2024, sentiment has plunged a staggering 32.4%, the largest annual drop since July 2022. The index now sits at the 1st percentile of all 568 monthly readings since 1978.
According to Joanne Hsu, Director of the Surveys of Consumers at the University of Michigan, the decline was especially sharp in expectations about future financial and business conditions.
“This month’s deterioration was particularly strong for middle-income families,” she noted, “but expectations worsened broadly across all demographics — by age, education, income, and political affiliation.”
Hsu also pointed to continued anxiety over U.S. trade policy and renewed fears of inflation resurgence as key drivers. While the decline in current economic conditions was more modest, the Consumer Expectations Index (CEI) fell to 47.3 — the lowest since 1980, dropping 10.1% from March and 37.8% from a year ago.
The Current Economic Conditions Index (CECI) also dropped to 59.8, its lowest point since December 2022, and a 24.3% drop year-over-year.
Adding to concerns, consumers are now bracing for significantly higher prices. Year-ahead inflation expectations surged to 6.5% in April, up from 5.0% in March and the highest since 1981. It was the fourth straight month of a 0.5-point or greater increase, reflecting inflation fears even after President Trump paused some tariff hikes on April 9.
Long-run inflation expectations also edged higher, from 4.1% to 4.4%, with independents showing the biggest increase.
These inflationary fears are paired with declining optimism about the labor market and personal income prospects. Hsu noted that without stronger income growth, consumer spending — a key driver of the U.S. economy — is unlikely to hold up in the face of mounting headwinds.
Historical comparisons underscore the gravity of the current reading: sentiment is 38.3% below its long-term average of 84.5 and 37.4% below the geometric mean of 83.4. The latest data point is even lower than the sentiment levels recorded at the start of all six U.S. recessions since the index’s creation.
Other economic indicators echo this concern. The NFIB Small Business Optimism Index, which often moves in tandem with consumer sentiment, also showed recent declines. Likewise, the Conference Board’s Consumer Confidence Index paints a similarly gloomy picture, despite its stronger emphasis on labor market conditions.
The next release of the Michigan Consumer Sentiment Index is scheduled for May 16 and will offer further insight into how American households are reacting to evolving economic conditions, inflation, and trade policies.
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