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

The University of Michigan on Friday (4-14-23) released the preliminary results of its Consumer Sentiment Index (CSI) for April.

• The Index of Consumer Sentiment increased to a reading of 63.5 in April, up from the March reading of 62.0. This is a month-over-month increase of 2.4% but down 2.6% year-over-year (65.2 in April 2022).
• The Current Economic Conditions rose to a reading of 68.6 in April, up from the March reading of 66.3. This is a month-over-month increase of 3.5% but down 1.2% year-over-year (69.4 in April 2022).
• The Index of Consumer Expectations increased to a reading of 60.3 in April, up from the March reading of 59.2. This is a month-over-month gain of 1.9% but down 3.5% year-over-year (62.5 in April 2022).

In remarks and analysis prepared to accompany the release of the preliminary April, Dr. Joanne Hsu, Director of Surveys for the University of Michigan, said:

“Consumer sentiment was essentially unchanged this month, inching up less than two index points from March. Sentiment is now about 3% below a year ago but 27% above the all-time low from last June. Rising sentiment for lower-income consumers was offset by declines among those with higher incomes. While consumers have noted the easing of inflation among durable goods and cars, they still expect high inflation to persist, at least in the short run. On net, consumers did not perceive material changes in the economic environment in April.

Year-ahead inflation expectations rose from 3.6% in March to 4.6% in April. These expectations have been seesawing for four consecutive months, alternating between increases and decreases. Uncertainty over short-run inflation expectations continues to be notably elevated, indicating that the recent volatility in expected year-ahead inflation is likely to continue. The bumpiness in inflation expectations is limited to the short run as long-run inflation expectations remain remarkably stable. They came in at 2.9% for the fifth consecutive month and have stayed within the narrow 2.9–3.1% range for 20 of the last 21 months.”