US consumer sentiment slips in April; inflation expectations rise

US CONSUMER sentiment ebbed in April while inflation expectations for the next 12 months and beyond increased, a survey showed on Friday (Apr 12).

The University of Michigan’s preliminary reading on the overall index of consumer sentiment came in at 77.9 this month, compared to a final reading of 79.4 in March.

Since January, the sentiment index has remained within a very narrow 2.5 point range, well under the five points which the University of Michigan said was necessary for a statistically significant difference in readings. Economists polled by Reuters had forecast a preliminary reading of 79.

“Overall, consumers are reserving judgement 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,” said Surveys of Consumers Director Joanne Hsu in a statement.

The survey’s reading of one-year inflation expectations increased to 3.1 per cent in April from 2.9 per cent in March, rising just above the 2.3 to 3 per cent range seen in the two years before the Covid-19 pandemic. The survey’s five-year inflation outlook rose to 3 per cent from 2.8 per cent in the prior month. REUTERS