U.S. consumer sentiment and Americans’ view on the economy both fell more than expected in April, as inflation expectations rose.
The University of Michigan’s consumer sentiment index released Friday fell to 77.9, down from 79.4 in March. Economists polled by LSEG had expected a reading of 79.
American households are turning more pessimistic as higher prices for everyday items take their toll.
The latest University of Michigan read on consumer sentiment for April fell to 79.3 after coming in at 82.5 last month. Economists only expected that index to fall to 82.2.
“A slight uptick in inflation expectations in April reflects some frustration that the inflation slowdown may have stalled,” Surveys of Consumers Director Joanne Hsu said in a statement.
The survey’s reading of one-year inflation expectations increased to 3.1% in April from 2.9% in March, rising just above the 2.3 to 3.0% range seen in the two years before the COVID-19 pandemic. The survey’s five-year inflation outlook rose to 3.0% from 2.8% in the prior month.
Meanwhile, inflation expectations for the next 12 months and beyond rose.
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“Overall, consumers are reserving judgment 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,” Hsu added.
The findings come on the heels of this week’s Labor Department data showing that the Consumer Price Index – a broad measure of the price of everyday goods including gasoline, groceries and rent – rose again in March for the third straight month to 3.5% from a year ago. A separate report on inflation at the wholesale level rose 2.1%, the biggest jump since April 2023.
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Although inflation has fallen considerably from a peak of 9.1%, it has remained well above the Federal Reserve‘s 2% target for more than two years.
FOX Business’ Megan Henney and Reuters contributed to this report.