University of Michigan Reports Final Results of Its Consumer Sentiment Index for April

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

• The Index of Consumer Sentiment declined to a reading of 77.2, down from 79.4 in March. This is a month-over-month decline of 2.8% but up 21.2% year-over-year (63.7 in April 2023).
• Current Economic Conditions dropped to a reading of 79.0, down from 82.5 in March. This is a month-over-month decline of 4.2% but up 15.3% year-over-year (68.5 in April 2023).
• The Index of Consumer Expectations inched lower to a reading of 76.0, down from 77.4 in March. This is a month-over-month decline of 1.8% but up 25.4% year-over-year (60.6 in April 2023).

In remarks and analysis prepared to accompany the final results for April, Surveys of Consumers Director Joanne Hsu said,

“Consumer sentiment continued to plateau and was virtually unchanged for the third month in a row. Since January, sentiment has remained remarkably stable within a very narrow 2.5 index point range, well under the 4.8 points necessary for a statistically significant difference in readings. The long-run business outlook inched up to reach its highest reading since June 2021, while views of personal finances softened. Different parts of the population exhibited offsetting changes this month. Republicans posted notable declines in sentiment this month, whereas Democrats and Independents did not. Sentiment for younger consumers rose, in contrast to middle-aged and older adults whose sentiment changed little or fell. Overall, consumers continue to express uncertainty about the future trajectory of the economy pending the outcomes of the upcoming election, but at this time there is no evidence that global geopolitical factors are on the forefront of consumers’ minds.

Year-ahead inflation expectations ticked up from 2.9% last month to 3.2% this month. Long-run inflation expectations also edged up, from 2.8% last month to 3.0% this month; they have been within the narrow 2.9–3.1% range for 29 of the last 33 months. Long-run inflation expectations remain elevated relative to the 2.2–2.6% range seen in the two years pre-pandemic.”