University of Michigan Reports 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 declined to a reading of 77.9, down from 79.4 in March. This is a month-over-month decline of 1.9% but up 22.3% year-over-year (63.7 in April 2023).
• Current Economic Conditions dropped to a reading of 79.3, down from 82.5 in March. This is a month-over-month decline of 3.9% but up 15.8% year-over-year (68.5 in April 2023).
• The Index of Consumer Expectations inched lower to a reading of 77.0, down from 77.4 in March. This is a month-over-month decline of 0.5% but up 27.1% year-over-year (60.6 in April 2023).

In remarks and analysis prepared to accompany the report, Surveys of Consumers Director Joanne Hsu said,

“Sentiment moved sideways for the fourth straight month, as consumers perceived few meaningful developments in the economy. Since January, sentiment has remained remarkably steady within a very narrow 2.5 index point range, well under the 5 points necessary for a statistically significant difference in readings. Consumers perceived little change in the state of the economy since the start of the new year. Expectations over personal finances, business conditions, and labor markets have all been stable over the last four months. However, a slight uptick in inflation expectations in April reflects some frustration that the inflation slowdown may have stalled. Overall, consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy.

Year-ahead inflation expectations ticked up from 2.9% last month to 3.1% this month, lifting just above the 2.3–3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations also edged up, from 2.8% last month to 3.0% this month.”