| Consensus | Consensus Range | Actual | Previous | |
| Index | 52.0 | 50.0 to 52.9 | 47.6 | 53.3 |
| Year-ahead Inflation Expectations | 4.8% | 3.8% |
Highlights
U.S. consumer sentiment plunged this month, with April's preliminary reading coming in at 47.6 vs. 53.3 in March and 56.6 in February. This is below the consensus of 52.0 in the Econoday survey of forecasters. Consumer sentiment fell by about 11 percent, dragged down by the Iran war.
Sentiment is down 8.8 percent from April 2025. Ninety-eight percent of the interviews occurred before the April 7 announcement of a temporary cease-fire, although any improvement in economic expectations will be contingent on confidence that the supply disruptions from the Iran conflict have ended and gas prices have moderated.
One-year expected business conditions plunged about 20 percent and is now 6 percent below last April, the report noted. Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month's fall.
Assessments of personal finances declined about 11 percent, with consumers expressing a substantial increase in concerns over high prices and weaker asset values, it added. Buying conditions for durables and vehicles worsened, again on the basis of high prices.
Preliminary year-ahead inflation expectations jumped to 4.8 percent in April from 3.4 percent in March. This is the biggest one-month rise since April 2025, and [t]he current reading exceeds those seen in 2024 and remains well above the 2.3-3.0% range seen in the two years pre-pandemic, the report said.
Long-run inflation expectations in April rose to 3.4 percent from 3.2 percent last month. This is the highest reading since November 2025 and remains above the 2.8 percent and 3.2 percent range seen in 2024.
Market Consensus Before Announcement
The Iran war and soaring gas prices expected to depress sentiment in the preliminary April reading to 52.0 from 53.3 in the March final.
Definition
The University of Michigan's Consumer Survey Center questions households each month on their assessment of current conditions and expectations of future conditions. Preliminary estimates for a month are released at mid-month and are based on about 420 respondents. Final estimates are released near the end of the month and are based on about 600 respondents.
Description
The pattern in consumer attitudes and spending is often the foremost 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.
This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer sentiment index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.
Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying 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. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.
