Tags: consumer | sentiment | trade | war | fears

Consumer Sentiment Falls on Trade; Confidence Higher Than 5 Years Ago

Consumer Sentiment Falls on Trade; Confidence Higher Than 5 Years Ago
(AlexlmxDreamstime)

Friday, 13 April 2018 10:20 AM

U.S. consumer sentiment fell more than forecast in April on concerns about the impact of White House trade policy, according to a University of Michigan report Friday.

The Michigan Sentiment Index declined to 97.8 (est. 100.4) from prior month’s 101.4 reading that was the strongest since 2004, the University of Michigan report said.

Even with the monthly setback, confidence remains elevated. The index also remains higher than it was five years ago, when it was reported in April 2013 to be 76.4.

Highlights of Michigan Sentiment (April, preliminary)

  • Sentiment index declined to 97.8 (est. 100.4) from prior month’s 101.4 reading that was the strongest since 2004, the University of Michigan report said.
  • Current conditions gauge, which measures Americans’ perceptions of their finances, decreased to 115 from a record 121.2
  • Expectations measure dropped to a three-month low of 86.8 from 88.8

Key Takeaways

  • Some 29 percent of respondents to the survey made spontaneous references to U.S. trade policy, with nearly all of the comments being negative.
  • Even so, there were fewer unfavorable views of economic policy in April -- 27 percent -- than the previous month’s 33 percent.
  • Expectations of rising borrowing costs and slightly slower economic growth also weighed on sentiment this month.
  • At the same time, expectations of income growth picked up, reflecting the strong labor market. That was one reason consumers had more favorable views on automobile and home purchases. Upbeat moods are a positive for consumer spending, the biggest part of the economy.

Official’s Views

“The small decline was widely shared by all age and income subgroups and across all regions of the country,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “Importantly, confidence still remains relatively high, despite the recent losses that were mainly due to concerns about the potential impact of Trump’s trade policies on the domestic economy.”

Other Details

  • One-year inflation-rate expectations cooled to 2.7 percent from 2.8 percent
  • Inflation rate over next five to 10 years seen at 2.4 percent, after 2.5 percent
  • About 66 percent cited negative economic news in April, up from 55 percent the prior month.

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U.S. consumer sentiment fell more than forecast in April on concerns about the impact of White House trade policy, according to a University of Michigan report Friday. Even with the monthly setback, confidence remains elevated.
consumer, sentiment, trade, war, fears
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2018-20-13
Friday, 13 April 2018 10:20 AM
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