Consumer sentiment improved slightly in late April from earlier in the month but remained deeply depressed, weighed down by widespread concerns over inflation, tariffs, and a historic drop in confidence among Democrats.
The University of Michigan’s final reading of its Consumer Sentiment Index rose to 52.2 in April, up from a preliminary estimate of 50.8 but down from 57.0 in March. It marked the fourth consecutive monthly decline and the lowest final reading since July 2022.
The Expectations Index, which measures sentiment about the economy in the months ahead, fell to 47.3 in April, down from 52.6 in March. The steep three-month decline—more than 32 percent since January—was the sharpest drop in expectations since the lead-up to the 1990 recession.
The overall slide in sentiment was driven in large part by a plunge in confidence among Democrats, whose index reading fell to 34.4, the lowest level ever recorded for that group in the survey’s decades-long history. Sentiment among Independents also declined sharply to 46.2. Republican sentiment, by contrast, rose to 90.2, the highest since the end of Donald Trump’s previous term in office.
The collapse in Democratic sentiment extended across both present conditions and expectations for the future. The Expectations Index for Democrats fell to 22.7, a level rarely seen for any political group in past surveys, and the Current Conditions Index dropped to 52.6.
Survey Director Joanne Hsu said consumers reported “intensifying unease” about the economy, pointing in particular to the risks posed by trade policy and the potential for renewed inflation.
Consumers are also concerned about their incomes, with many saying they expect weaker income growth in the year ahead.
“Without reliably strong incomes, spending is unlikely to remain robust amid the numerous warning signs noted by consumers,” she said in a statement.
Inflation expectations jumped sharply in April but the final read is lower than the preliminary figure. This likely reflects the pause in many tariffs as the Trump administration negotiates trade agreements. Consumers said they expect prices to rise 6.5 percent over the next year, up from 5.0 percent a month earlier and the highest since 1981. In the mid-month reading, the year-ahead figure was up to 6.7 percent. Long-run inflation expectations climbed to 4.4 percent, the highest since 1991.
The partisan gap is strongly evident in the inflation expectations. Democrats expect eight percent inflation over the next 12 months. Republicans expect just 0.4 percent. Independents expect 6.5 percent.
About 60 percent of respondents spontaneously mentioned tariffs in their responses to the survey, up from 44 percent in March. The survey was conducted between March 25 and April 21, a period that included President Trump’s announcement of a 90-day pause in some reciprocal tariff increases and a separate move to raise tariffs on Chinese goods to 145 percent.
Expectations for the labor market also deteriorated, with nearly two-thirds of consumers saying they anticipate unemployment will rise in the year ahead. More than two-thirds said they expect their inflation-adjusted incomes to decline.
The University of Michigan’s Surveys of Consumers are based on interviews with a nationally representative sample of U.S. households. The next preliminary reading of consumer sentiment will be released on May 16.
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