Consumer sentiment remained deeply depressed in April but was revised slightly higher from earlier in the month, according to the latest Survey of Consumers from the University of Michigan.
- The final reading showed sentiment falling to 52.2 in April, down from 57.0 in March and marking the fourth consecutive monthly decline.
- It was the lowest level since July 2022, continuing a worrying trend of growing consumer anxiety.
Revised Upward: Despite the continued decline, the mood was slightly better than initially feared. The first reading earlier this month showed sentiment falling to 50.8, suggesting that some stabilization occurred following the partial tariff pause announced on April 9.
Inflation Concerns: Inflation expectations remained a major source of concern. Year-ahead inflation expectations jumped to 6.5% in April from 5.0% in March, reaching the highest level since 1981.
- However, like the overall sentiment reading, the final figure was an improvement from the initial estimate of 6.7% released earlier in the month.
The Future: The expectations index, which measures consumers’ outlook for the future, fell sharply to 47.3 in April from 52.6 in March. Although this was the lowest reading since July 2022, it represented a slight upward revision from the preliminary reading of 47.1.
What They’re Saying: Surveys of Consumers Director Joanne Hsu noted that the tariff pause helped stop the slide of consumer concern, “”After the April 9 partial pause in tariff increases, inflation expectations ebbed but remained substantially elevated relative to March.”
Bottom Line: The data shows that while the pause in tariffs helped prevent an even larger collapse in confidence, American consumers remain deeply uneasy about the direction of the economy.
