People shop in Bayonne, New Jersey on April 8, 2025.
Charly Triballeau | Afp | Getty Images
Consumer sentiment grew even worse than expected in April as the expected inflation level hit its highest since 1981, a closely watched University of Michigan survey showed Friday.
The survey’s mid-month reading on consumer sentiment fell to 50.8, down from 57.0 in March and below the Dow Jones consensus estimate for 54.6. The move represented a 10.9% monthly change and was 34.2% lower than a year ago.
As sentiment moved lower, inflation worries surged.
Respondents’ expectation for inflation a year from now leaped to 6.7%, the highest level since November 1981 and up from 5% in March. At the five-year horizon, the expectation climbed to 4.4%, a 0.3 percentage point increase from March and the highest since June 1991.
Other measures in the survey also showed deterioration.
The current economic conditions index fell to 56.5, an 11.4% drop from March, while the expectations measure slipped to 47.2, a 10.3% fall. On an annual basis, the two measures dropped 28.5% and 37.9% respectively.
Sentiment declines came across all demographics, including age, income and political affiliation, according to Joanne Hsu, the survey director.
“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 said.
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