Consumer sentiment plunges
U.S. consumer sentiment fell to historically low levels in early April, with one report citing the University of Michigan index near 47.6. Coverage links the collapse to surging energy costs and worsening inflation expectations, and notes the drop is amplifying market fragility. (republicworld.com; webanditnews.com; bloomberg.com)
Americans turned sharply gloomier about the economy in early April, with the University of Michigan’s consumer sentiment index falling to 47.6, the lowest reading on record. (bloomberg.com) The preliminary April reading, released Friday, April 10, fell from 53.3 in March and landed below all but one estimate in a Bloomberg survey of economists. Reuters said economists had expected 52.0. (bloomberg.com; usnews.com) Consumers also raised their inflation forecasts. Bloomberg reported one-year inflation expectations jumped to 4.8% from 3.8% in March, while five-to-ten-year expectations edged up to 3.4% from 3.2%. (bloomberg.com) The survey landed the same day the Bureau of Labor Statistics reported that the Consumer Price Index rose 0.9% in March and 3.3% from a year earlier. Energy prices rose 10.9% in the month, led by a 21.2% jump in gasoline that accounted for nearly three-quarters of the overall increase. (bls.gov; bls.gov) Joanne Hsu, who directs the Michigan survey, said consumers with middle and higher incomes and stock wealth showed especially large sentiment drops after escalating gas prices and volatile financial markets following the Iran conflict. The survey site said declines appeared across age groups and political parties. (sca.isr.umich.edu) Bloomberg reported the current-conditions gauge fell to 50.1, also a record low, while the expectations index dropped to its weakest level since 1980. Consumers’ views of their own finances matched the worst reading since 2009. (bloomberg.com) That matters for spending because consumer outlays drive most United States economic activity, and Bloomberg said gasoline above $4 a gallon could push households to cut discretionary purchases. Reuters said the survey showed people bracing for faster price increases over the next 12 months even as job growth had recently rebounded. (bloomberg.com; usnews.com) Markets were already trading around a fragile ceasefire and disrupted oil flows. On Friday, the Standard and Poor’s 500 fell 0.11%, the Dow Jones Industrial Average lost 269 points, and the Nasdaq Composite rose 0.35% as traders weighed inflation data, energy prices, and the next round of United States-Iran talks. (cnbc.com; bloomberg.com) The Michigan release is still preliminary, and the final April reading is due later this month. For now, the message from households is simple: higher gas prices and higher inflation expectations are hitting confidence faster than any ceasefire has restored it. (sca.isr.umich.edu; bloomberg.com)
