MacroMavens President Stephanie Pomboy discusses the economy, the impact of inflation on consumers, and her expectations for fourth quarter GDP.
U.S. consumer sentiment and Americans’ economic outlook both fell more than expected in April as inflation expectations rose.
The University of Michigan Consumer Confidence Index released Friday was 77.9, down from 79.4 in March. Economists’ forecasts compiled by LSEG were 79.
US consumer sentiment declined in April, but inflation expectations rose. (Gabby Jones/Bloomberg via Getty Images/Getty Images)
U.S. households are becoming increasingly pessimistic as the prices of daily necessities soar.
The latest survey of consumer sentiment for April released by the University of Michigan showed a drop of 79.3 from 82.5 last month. Economists had only expected the index to fall to 82.2.
“The slight increase in inflation expectations in April reflects some frustration that the inflation slowdown may have stalled,” Joan Hsu, director of the Consumer Research Bureau, said in a statement.
One-year inflation expectations rose to 3.1% in April from 2.9% in March, the survey found, slightly above the range of 2.3% to 3.0% seen in the two years before the COVID-19 pandemic. . The survey’s five-year inflation outlook rose to 3.0% from 2.8% last month.
Meanwhile, inflation expectations for the next 12 months and beyond rose.
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“Overall, consumers are suspending their decisions about the economy in light of the upcoming election, but from the perspective of many consumers, the election could have a significant impact on the trajectory of the economy.” Mr. Sue added.
Customers shop at a Costco store on Wednesday, February 28, 2024, in Teterboro, New Jersey, USA. Inflation rose in March, rising 3.5% year-on-year. (Stephanie Keith/Bloomberg via Getty Images/Getty Images)
The survey results come this week as the Consumer Price Index – a broad measure of the prices of daily necessities including gasoline, groceries and rent – rose again for the third straight month in March, to 3.5% year-on-year. The announcement follows data from the Department of Labor. . A separate report on wholesale-level inflation rose 2.1%, the biggest rise since April 2023.
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Although the inflation rate has fallen significantly from its peak of 9.1%, it remains well above 9.1%. federal reserveThe 2% target has been in place for more than two years.
FOX Business’ Megan Henney and Reuters contributed to this report.
