Consumer Sentiment Down 10.9% in Early April, Down 34.2% YOY

Ann Arbor, MI, April 11, 2025-Consumer sentiment declined 10.9% to 50.8 in early April, according to preliminary results from the University of Michigan Survey of Consumers.

This represents a 34.2% decline year over year.

“Consumer sentiment fell for the fourth straight month, plunging 11% from March,” says Survey of Consumers director Joanne Hsu. “This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region, and political affiliation. 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. 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. This lack of labor market confidence lies in sharp contrast to the past several years, when robust spending was supported primarily by strong labor markets and incomes. Note that interviews for this release were conducted between March 25 and April 8, closing prior to the April 9 tariff partial reversal.

“Year-ahead inflation expectations surged from 5.0% last month to 6.7% this month, the highest reading since 1981 and marking four consecutive months of unusually large increases of 0.5 percentage points or more. This month’s rise was seen across all three political affiliations. Long-run inflation expectations climbed from 4.1% in March to 4.4% in April, reflecting a particularly large jump among independents.”

"Americans turned much more pessimistic about the economy in April as President Trump’s trade war gained steam, according to a closely watched survey of consumer sentiment,” reports the Wall Street Journal.

“The University of Michigan’s consumer-sentiment index, released Friday, nosedived to 50.8 in April from 57 last month. Sentiment has been falling steadily throughout 2025. Expectations for inflation also hit the highest level in 44 years, according to the survey. 

“Sentiment is now at its second-lowest level in history, according to the survey. It was slightly lower in June 2022, when inflation was soaring thanks to snarled supply chains and pandemic buying. Back in 2022, the index touched 50, which was the lowest reading on record going back to 1952. 

“Sentiment declined for Democrats, Republicans and independents alike. 

“The survey took place over two weeks of back-and-forth tariff news, ending April 8. That makes it one of the first major economic gauges to capture the mood caused by Trump’s expansive new tariffs. Trump announced his tariff plan on April 2. On April 9, he said he would pause certain tariffs on most countries-though he hit China with additional levies.

“Respondents also said they were bracing for prices to surge 6.7% in the year ahead-a level of pessimism about costs last seen in the inflation-wracked early 1980s. That suggests Americans expect tariffs will push up prices fast; year-over-year consumer-price inflation in March was 2.4%, according to the Labor Department.

“Some families, worried that higher prices would follow Trump’s tariff announcement, rushed out over the weekend to stock up on everyday goods or accelerate big purchases like cars or phones. 

“‘Consumers have spiraled from anxious to petrified,’ Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, said in a note.

“Sentiment for independents reached the lowest level on record. Sentiment for Republicans was the lowest it has been for almost any time during a Trump administration. (Republican sentiment was lower in late 2020, when Trump was still in office but after Joe Biden had won the election.)”