Consumer sentiment fell markedly in April to -42 from -35 in March, the lowest since February 2024 when it was also at -42. Consumers were far more pessimistic about future economic developments, as the measure fell to -67 from -44 in March, the lowest reading since at least January 2023.

Inflation expectations for the next twelve months among consumers also increased sharply in April, rising to 109 from 98, well above the long-term average of 101. At the same time, expectations of consumers' finances worsened to -33 from -28.

Caution was also evident for making current large purchases. That index fell to -28 from -26, while the outlook fell to -58 from -55.

Today's results show a far more pessimistic and cautious consumer than in recent months, as global uncertainty is most certainly weighing on their mindset. That will weigh on retail sales which will in turn will likely have effects on the broader economy.

The State Secretariat for Economic Affairs (SECO) compiles a quarterly survey of consumer attitudes on present and expected economic and financial conditions. The survey covers around 1,200 Swiss households and results are synthesised into a single summary consumer climate index that attempts to measure consumer sentiment.

The pattern in consumer attitudes and spending is often a major influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Consumer spending accounts for a major portion of the Swiss economy, so investors want to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. An increasing important element of the survey is the question concerning current buying intentions.