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The University of Michigan consumer sentiment data is crossing the wire here. Let me get you those numbers coming in here. So University of Michigan one-year inflation expectations just a tick below the prior result, but still coming in at 6.5%. That is a touch below the survey estimate of 6.8%. Five to 10 year inflation expectations coming bang in line at 4%. That is the same number we got in the prior print and in line with the survey data as well. Expectations coming in just a bit hot at 47.3. The overall number coming in at 52.2. Current conditions coming in a bit above expectations as well, coming in at 59.8. But what we have been keenly watching here at Yahoo Finance is those inflation expectations as an indicator of where consumers see this economy heading. Those inflation expectations again, for the year ahead coming in at 6.5%, just a tick below the survey expectation of 6.8%. Our very own Josh Shafer is with me on set to break down the numbers. Josh, what's your takeaway from this?

Yeah, I think so, Maddie. The thing about this release is, of course, you have a preliminary reading, which we got two weeks ago, and then you have the final reading. And given the tariff back and forth that we live in these days, you're what you're seeing in a couple of those numbers you were just listing is the final reading happened after April 9th, after the 90 day pause. So what you saw as consumer expectations for inflations come down slightly, right? You're looking at a number, I think it's 6.5% for the next year. That is down again, slightly from the 6.7 you saw before, still well above the 5% you saw in March, and still the highest reading since 1981. So net net, okay, the tariff pause helped consumers feel a little bit better about the picture. I think is sort of the takeaway here, but going through the release, you still have consumers feeling pretty grim about the overall economic outlook, about the labor market outlook. There's been expectations for unemployment have been their highest since 2008 or 2009 pretty consistently in this release for about a month now. That's continuing. So there I wouldn't say April 9th really cleared all of those concerns that consumers seem to have, but I guess a little bit better than the initial reading, which came right after Liberation Day on April 2nd, and I think there was perhaps more of a shock factor in that one.

And I think, you know, it's obviously a consumer sentiment survey. This is not hard data, quote unquote, but 6.5% inflation certainly keenly above the Fed's desired 2% level. And I'm curious, Josh, how this might be playing into any of the other expectations that you're hearing from analysts on the street, just about where the economy is heading.

Yes. I've been asking economists essentially, okay, we're talking about a potential slowdown, right? I think that's basically consensus at this point. Perhaps the debate is how much we're going to slow down, but when are we going to start seeing that in the data? And largely, what economists have argued is it's probably a summer cool down, summer slow down environment that we're going to see. So what you're seeing right now, again, April is sort of when most of the tariffs hit. You don't get the April, quote-unquote, hard data. That means maybe your unemployment rate, maybe consumer spending, maybe goods orders, you're not going to see that until May. And then May might have some interesting numbers too, because again, we've sort of been going back and forth on tariffs. They think we're going to get a clearer picture by the time we maybe hit June. So the data from May, you start to see in June, then do you see a slowdown, and then the interesting part of all of that being the labor market still usually lags, right? So the way this sort of works is if I'm a business, first I need consumers to slow down so my business slows down, then I need to think about how I'm going to cut costs, then at some point it leads to me lowering head count. Head count usually comes a little bit later. So in terms of initial jobless claims, in terms of that unemployment rate, in terms of non-farm payrolls, we have jobs report coming next week. Not a lot of expectations for that outlook to get too too cold until again, perhaps late even later in the summer into the fall. So it seems like we're talking a lot about bad survey data right now. It's going to take a while to figure out how bad the actual data is going to be.

And that's why the Fed is perhaps in no rush to cut, though if you listen to Fed speakers this week, maybe they'll cut as early as June, but it would take that hard data for that to happen. One really quick thing from the Umesh report here talking about how even more concerning for the path of the economy is consumers anticipating weaker income growth. If we do see that weaker income growth, does that lead to a little bit of a slowdown in spending moving forward? Josh, thank you so much. Really appreciate it.