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Consumer Sentiment ‘Remarkably Steady’ for Fourth Consecutive Month

woman clothes shopping, checking tag

Consumer sentiment remained essentially unchanged in April, as it has been since the beginning of the year.

While the figure inched down 1.9% from March, it remained “remarkably steady” within a 2.5 index point range and under the 5-point change that is considered to be “statistically significant,” according to the April preliminary results from the University of Michigan Surveys of Consumers released Friday (April 12).

“Sentiment moved sideways for the fourth straight month, as consumers perceived few meaningful developments in the economy,” Surveys of Consumers Director Joanne Hsu said in a statement when announcing the results.

Consumers’ expectations in terms of personal finances, business conditions and labor markets have remained stable since the beginning of the year, according to the report.

There was a slight uptick in consumers’ inflation expectations in April, however, the report said. Their year-ahead inflation expectations edged up from 2.9% in March to 3.1% in April.

This figure was just above the range of 2.3% to 3% that was seen during the two years preceding the pandemic, per the report.

Consumers’ long-run inflation expectations also edged up, from 2.8% in March to 3% in April, according to the report.

Hsu attributed this uptick to “some frustration that the inflation slowdown may have stalled.”

“Overall, consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy,” Hsu said in the statement.

Before holding steady for four months, consumer sentiment soared in December, reaching a point 13% higher than the previous month and 16% above the year-ago level.

At the time, Hsu attributed that rise to improvements in the expected trajectory of inflation, as the year-ahead inflation expectations reading was the lowest seen since March 2021.

The February installment of the PYMNTS Intelligence “Consumer Inflation Sentiment” series, “The Cautious Spender: US Consumers Now Think First, Spend Second,” revealed that as of January, 57% of consumers expected higher retail prices in the next six months.

This concern is also reflected in the fact that more consumers are making only the minimum payments on their credit cards, the debt on those cards is rising and some delinquencies are at 11-year highs.