Consumer sentiment in the U.S. improved modestly in early April, as reported in the University of Michigan’s Consumer Confidence Index, rising to 63.5 (preliminary) from 62 index points in March—better than the market expectation of 62.
The index of current economic conditions rose from 66.3 in March to 68.6 in April, up 3.5 percent. The index of consumer expectations rose from 59.2 in March to 60.3 in April, up 1.9 percent. The year-ahead inflation expectations increased from 3.6 percent in March to 4.2 percent in April, while long-run inflation expectations remained stable at 2.9 percent for the fifth month.
Surveys of Consumers Director Joanne Hsu said in the report, “Consumer sentiment was essentially unchanged this month, inching up less than two index points from March. Sentiment is now about 3 percent below a year ago but 27 percent above the all-time low from last June.
Declines among those with higher incomes offset rising sentiment for lower-income consumers. While consumers noted the easing of inflation among durable goods and cars, they expect high inflation to persist, at least in the short term. Consumers did not perceive material changes in the economic environment on the net in April.
“Year-ahead inflation expectations rose from 3.6 percent in March to 4.6 percent 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 remained remarkably stable. They came in at 2.9 percent for the fifth consecutive month and have stayed within the narrow 2.9 percent 3.1 percent range for 20 of the last 21 months.”
