| Consensus | Consensus Range | Actual | Previous | |
| Index | 48.0 | 47.6 to 49.8 | 49.8 | 47.6 |
| Year-ahead Inflation Expectations | 4.7% | 4.8% |
Highlights
U.S. consumer sentiment plunged this month, with April's final reading coming in at 49.8 vs. 53.3 in March and 56.6 in February. This is slightly better than the consensus of 48.0 in the Econoday survey of forecasters. Consumer sentiment dropped by about 6.6 percent, comparable to the depths reached in June 2022.
Sentiment is down 4.6 percent from April 2025. The initial announcement of a two-week pause in the Iran war, and the resulting ease in gasoline prices, caused the modest bounce in confidence from the 47.6 preliminary reading.
Still, [e]xpected business conditions declined for both short and long-time horizons, nearly matching year-ago readings when the reciprocal tariff regime was implemented, the report said.
Decreases in sentiment were seen across political party, income, age, and education, it added, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers.
Final year-ahead inflation expectations jumped to 4.7 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 3.5 percent from 3.2 percent last month. This is the highest reading since October 2025 and remains above the 2.8 percent and 3.2 percent range seen in 2024.
Market Consensus Before Announcement
The preliminary reading was shockingly low at 47.6 for April so forecasters see a little recovery to 48.0 in the final April report, still remarkably weak versus 53.3 in March and down about 9 percent from a year ago. Consumers remain upset about rising prices for gas and other essentials and more fearful about jobs with the energy shock from the Iran war.
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.
