University of Michigan Releases Preliminary Results of Its Consumer Sentiment Index for April

On Friday, the University of Michigan released the preliminary results of its Surveys of Consumers for April.

• The Index of Consumer Sentiment fell to a reading of 47.6 in April, down 10.7% from 53.3 in March. Year-over-year, the index was down 8.8% from 52.2 in April.
• Current Economic Conditions declined to a reading of 50.1 in April, down 10.2% from 55.8 in March and 16.2% lower than 59.8 in April.
• The Index of Consumer Expectations fell to 46.1 in April, down 10.8% from 51.7 in March and 2.5% below 47.3 in April.

In remarks accompanying the release, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment sank about 11% this month, extending a decline that began with the start of the Iran conflict, and is currently about 9% below a year ago. Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month’s fall. One-year expected business conditions plunged about 20% and is now 6% below last April. Assessments of personal finances declined about 11%, with consumers expressing a substantial increase in concerns over high prices and weaker asset values. Buying conditions for durables and vehicles worsened, again on the basis of high prices. Open ended comments show that many consumers blame the Iran conflict for unfavorable changes to the economy. Note that 98% of interviews were completed prior to the April 7 announcement of a temporary cease-fire. Economic expectations will likely improve after consumers gain confidence that the supply disruptions stemming from the Iran conflict have ended and gas prices have moderated.”