U.S. consumer sentiment fell for the fourth month in a row in April as Americans question what tariffs and trade tensions will mean for their wallets.
The University of Michigan Surveys of Consumers announced on April 25 that its Consumer Sentiment Index stands at 52.2 ‒ higher than its preliminary reading of 50.8 two weeks ago ‒ but still down from 57 in March. Surveys of Consumers Director Joanne Hsu said in a statement that those surveyed perceived risks in multiple aspects of the economy, citing uncertainty around trade policy and concerns that inflation could resurge.
"Even more concerning for the path of the economy, consumers anticipated weaker income growth for themselves in the year ahead," Hsu said. "Without reliably strong incomes, spending is unlikely to remain strong amid the numerous warning signs perceived by consumers."
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The Index of Expectations fell to 47.3 this month, down from 52.6 in March. Expectations have fallen 32% since January, "the steepest three-month percentage decline seen since the 1990 recession," Hsu said. She specifically pointed to drop-offs in consumers' expectations about personal finances and business conditions.
Expectations fell across the board, but the decline was particularly prominent among middle-income families, Hsu said. Prices remain a top concern. Hsu noted year-ahead inflation expectations rose to 6.5% in April, the highest reading since 1981.
"Inflation expectations evolved with major trade policy announcements this month," Hsu said. "After the April 9 partial pause in tariff increases, inflation expectations ebbed but remained substantially elevated relative to March."
Jordan Rizzuto, the chief investment officer at GammaRoad Capital Partners, said the consistency and magnitude of the declines in sentiment and expectations are evidence that the U.S. is moving toward a stagflationary market environment, “which is one of the most challenging environments for a traditional investment portfolio.”
President Donald Trump appeared to somewhat soften his language on tariffs after they spooked global markets. He told reporters on April 22 that he predicts the 145% tariffs he levied on China will eventually "come down substantially."
The president told Time magazine the same day that he would consider it a win if the U.S. had 20% to 50% tariffs on imports a year from now.
Reach Rachel Barber at rbaber@usatoday.com and follow her on X @rachelbarber_
This article originally appeared on USA TODAY: US consumer sentiment falls in April, dropping fourth month in a row