The feeling of the consumer improved slightly at the end of April since the beginning of the month, but remained deeply depressed, overwhelmed by the broad concerns about inflation, tariffs and a historical fall of trust among the Democrats.
The final reading of the University of Michigan of its consumer’s feelings increased to 52.2 in April, compared to a preliminary estimate or 50.8, but below 57.0 in March. It marked the fourth consecutive monthly decrease and the lowest final reading since July 2022.
The index of expectations, which measures the feeling of the economy in the coming months, fell to 47.3 in April, below 52.6 in March. The strong decrease of three months more than 32 percent since January was the strongest drop in expectations since the period prior to the 1990 recession.
The general fall of the feeling was largely driven by a fall in trust among the Democrats, whose reading of the index fell to 34.4, the lowest level recorded for that group in the history of decades of the survey. The feeling among the independents also decreased abruptly to 46.2. The Republican feeling, on the contrary, increased to 90.2, the highest since the end of Donald Trump’s previous mandate in office.
The collapse in the democratic feeling extended through conditions and expectations presented for the future. The Expectations Index for Democrats fell to 22.7, a rarely seen level for any political group in past surveys, and the current conditions index fell to 52.6.
The director of the survey, Joanne Hsu, said that consumers reported “intense concern” about the economy, pointing to participation to the risks raised by commercial policy and the potential of renewed inflation.
Consumers are also concerned about their income, and many say they expect a growth of Waker in the following year.
“Without strong reliable income, it is unlikely that the expense remains robust in the midst of the numerous warning signals observed by consumers,” he said in a statement.
Inflation expectations increased sharply in April, but the final reading is lower than the preliminary figure. This probably reflects the pause in many rates, since the Trump administration negotiates trade agreements. Consumers said they expect prices to increase approximately 6.5 percent next year, compared to 5.0 percent one months before and the highest since 1981. In the reading of the middle of the month, the figure of the year more than 6.7 percent. Long -term inflation expectations increased to 4.4 percent, the highest since 1991.
The partisan gap is very evident in inflation expectations. Democrats expect an eight percent inflation in the next 12 months. Republicans expect only 0.4 percent. Independents expect 6.5 percent.
About 60 percent of respondents spontaneously mentioned tariffs in their responses to the survey, compared to 44 percent in March. The survey was conducted between March 25 and April 21, a period that included the announcement of President Trump of a 90 -day pause in some increases in reciprocal rates and a separate movement to increase tariffs on Chinese products to 145 percent.
Expectations for the labor market were also determined, with almost two thirds of consumers who say they anticipate that unjustification will increase in next year. More than two thirds said they expect their income adjusted by inflation to decrease.
Consumer surveys at the University of Michigan are based on interviews with a national representative of US homes. The next preliminary reading of the consumer’s feeling will be published on May 16.
