A major survey of U.S. households on Friday showed a resurgence in inflation is starting to weigh on perceptions of the health of the U.S. economy.
The University of Michigan’s Consumer Sentiment Index fell from 79.4 in March to a preliminary rating of 77.9 in April. Economists had expected the index to remain unchanged at 79.
The index showing the current economic situation fell from 82.5 to 79.3. The index indicating the expected situation was 77.0, down from 77.4 at the end of April.
Sentiment was on the rise last year, but stalled as the year began. It has remained near current levels for four consecutive months.
“Personal financial, economic, and labor market expectations have all remained stable over the past four months. However, the slight rise in inflation expectations in April suggests that the inflation slowdown may have stalled. “It reflects the department’s dissatisfaction,” said Joan Hsu, head of the investigation.
Su added that many consumers are “reserving judgment” about the economy ahead of this year’s presidential election. Su said many expect the election to have a “significant impact” on the economy.
Inflation has flared up again this year. In the first three months of this year, inflation as measured by the Consumer Price Index has been running at an annual rate of 4.6%, well above the 1.9% rate in the last three months of last year.
As a result, inflation expectations are rising. In the April survey, the previous year’s forecast rose to 3.1% from 2.9% in March. The long-term expectations indicator rose from 3.8% to 3.0%.
