Consumer sentiment plummeted 10.9% in April and has now fallen for four consecutive months, according to preliminary survey data released Friday by the University of Michigan.
The university’s widely followed index, which gauges consumer attitudes on various economic issues, measured 50.8 in April, down from 57.0 in March. A year ago, it posted a reading of 77.2, which equates to a 34.2% year-over-year decline.
The survey also found that consumers’ expectations of overall inflation over the next year rose to 6.7% this month from 5% in March. The 6.7% prediction is the highest reading since 1981.
The dour outlook of U.S. consumers may be an ominous sign for the future amid a global trade market that has been upended by the Trump administration’s sweeping tariffs, including 145% tariffs on imports from China.
“The collapse in consumer sentiment will likely continue to erode as we have yet to see the knock-on impact of the ongoing global trade disruptions,” said Selma Hepp, chief economist of Cotality, in a statement. “Rising costs across several areas, including groceries, car purchases and maintenance, housing, etc., will continue to depress the budgets of American families. Small businesses will also likely lose confidence in the nation’s economy further as their business costs will keep rising.”
Interviews for the University of Michigan survey were conducted between March 25 and April 8. That means they encompassed President Donald Trump’s initial tariff announcement on April 2 and the implementation of a 10% baseline tariff rate on April 5, but not the partial tariff reversal on April 9, when Trump paused higher reciprocal tariffs on more than 75 trading partners for 90 days but raised tariffs on China.
Joanne Hsu, director of Surveys of Consumers at the University of Michigan, noted that the April results were “pervasive and unanimous across age, income, education, geographic region and political affiliation.” She said the results raise alarm bells about a potential economic recession.
“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 wrote. “The share of consumers expecting unemployment to rise in the year ahead increased for the fifth consecutive month and is now more than double the November 2024 reading and the highest since 2009.”
The University of Michigan’s final April consumer sentiment figures are scheduled for release on April 25.
