A report from
the University of Michigan showed on Friday that the preliminary reading for
the Reuters/Michigan index of consumer sentiment declined 10.9 per cent m-o-m
to 50.8 in early April. That represented the lowest reading since June 2022 (50.0).
Economists had forecast
the indicator would drop to 54.5 this
month from the March final
reading of 57.0.
According to
the report, the index of current economic conditions plummeted 11.4 per cent m-o-m to 56.5 in April (the lowest
level since June 2022 (53.8)), while the index of consumer expectations tumbled
10.3 per cent m-o-m to 47.2.
The report also
revealed that the estimates of year-ahead expected inflation soared from 5.0
per cent in March to 6.7 per cent
early this month, the highest reading since 1981. At
the same time, the 5-year expected inflation surged from 4.1 per cent to 4.4 per cent, the highest level since June 1991.
Commenting on
the latest survey, Surveys of Consumers
Director Joanne Hsu noted that consumer 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. “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,” she added.