Consumer sentiment tumbles
A new reading described American consumer sentiment as the weakest in roughly half a century, with households expressing growing unease about inflation, tariffs and economic uncertainty. Separate coverage warns that elevated inflation looks persistent rather than transient in recent data and commentary. (webanditnews.com, us.cnn.com)
Americans turned sharply gloomier about the economy in April, with the University of Michigan’s consumer sentiment index falling to 47.6, the lowest reading in the survey’s 74-year history. (sca.isr.umich.edu) The preliminary April reading was down from 53.3 in March and below the 52.0 economists expected. CNBC reported the drop at 10.7% in one month. (sca.isr.umich.edu, cnbc.com) The same survey showed year-ahead inflation expectations rising to 4.8%, up from 3.8% in March, while long-run inflation expectations climbed to 3.3%. Joanne Hsu, who directs the survey, said consumers across age, income, wealth and political groups all reported deterioration. (cnbc.com) Inflation is the backdrop. The Consumer Price Index rose 0.9% in March and 3.3% from a year earlier, the Bureau of Labor Statistics said on April 10, with energy prices up 10.9% for the month. (bls.gov, cnbc.com) Gasoline prices jumped 21.2% in March and accounted for nearly three-quarters of the monthly increase in the Consumer Price Index, Politico reported. Mike Reid, head of United States economics at RBC, said, “For consumers, this is very real.” (politico.com) Tariffs are part of the cost story too. The Budget Lab at Yale said on April 1 that the effective tariff rate reached 10.6% in January and that imported core goods and durable goods prices both rose 1.5% during 2025 through January. (budgetlab.yale.edu) The Budget Lab said tariff pass-through to consumer prices ranged from roughly 46% to 86% for core goods and 51% to 115% for durable goods, while cautioning that its figures are descriptive rather than causal. CNN reported businesses have been passing along more tariff costs as higher energy and transport expenses squeeze margins. (budgetlab.yale.edu, cnn.com) The Federal Reserve’s inflation target is 2% over time, measured by the Personal Consumption Expenditures price index, not the Consumer Price Index. March’s Consumer Price Index reading and the jump in inflation expectations both point in the opposite direction. (federalreserve.gov, bls.gov, cnbc.com) White House officials told Politico the war-related price increases and market disruptions will be temporary. The new sentiment reading suggests many households are not waiting for that argument to play out. (politico.com, sca.isr.umich.edu)
