Consumer sentiment declined sharply in April as 12-month inflation expectations surged to the highest level since 1981 amid President Donald Trump's escalating trade war.
The University of Michigan's Surveys of Consumers on Friday reported that its Consumer Sentiment Index dropped to 50.8 this month from 57 in April, a steeper decline than the 54.5 forecasted by economists polled by Reuters. It marked the fourth straight monthly decline in consumer sentiment.
"This decline was pervasive and unanimous across age, income, education, geographic region and political affiliation," said Surveys of Consumers Director Joanne Hsu.
"Sentiment has now lost more than 30% since December 2024 amid growing worries about trade war developments that have oscillated over the course of the year. Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate this month," Hsu added.
The report found that the share of consumers expecting to face unemployment in the year ahead increased for the fifth consecutive month. That metric is now more than double the survey's November 2024 reading and is at its highest level since 2009.