Consumer sentiment has now fallen for the fourth straight month as the economy continues to waver under a back and forth on tariffs and trade wars, according to the latest data from the University of Michigan.
The preliminary Index of Consumer Sentiment reading for April came in at 50.8, a 10.9% tumble from March’s reading of 57. This month’s data is also down a whopping 34.2% from last April’s reading of 77.2.
Surveys of Consumers Director Joanne Hsu noted that “sentiment has now lost more than 30% since December 2024 amid growing worries about trade war developments that have oscillated over the course of the year.”
It is also noteworthy that this data was collected before the Trump administration’s reversal of tariffs on Wednesday.
Dr. Selma Hepp, chief economist of Cotality (formerly CoreLogic), stated that this ongoing fall in sentiment will “likely continue” as “we have yet to see the knock-on impact of the ongoing global trade disruptions.”
“Rising costs across several areas, including groceries, car purchases and maintenance, housing, etc., will continue to depress the budgets of American families. Small businesses will also likely lose confidence in the nation’s economy further as their business costs will keep rising,” she continued.
The Current Economic Conditions Index came in at 56.5, down 11.4% from March’s 63.8 reading, and down 28.5% year-over-year. The Index of Consumer Expectations reading was 47.2, down 10.3% from the 52.6 reading in March, and down 37.9% year-over-year.
Hsu commented that “consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation and labor markets all continued to deteriorate this month.”
Hsu also stated that April’s data saw the share of consumers expecting unemployment to rise in the year ahead grow for the fifth consecutive month, and “is now more than double the November 2024 reading and the highest since 2009.”
“This lack of labor market confidence lies in sharp contrast to the past several years, when robust spending was supported primarily by strong labor markets and incomes,” she continued.
Year-ahead inflation expectations grew from 5% last month to 6.7% this month, the highest reading since 1981—marking four consecutive months of unusually large increases of 0.5% or more. This month’s rise was seen across all three political affiliations (Democrat, Republican and independent). Long-run inflation expectations rose slightly from 4.1% in March to 4.4% in April, reflecting a particularly large jump among independents.
The final data for April will be released Fri., April 25.