Consumer Sentiment Rose 10.6% to 65.7 in Early April on Strong Employment
Ann Arbor, MI, April 14, 2022-In early April, consumer sentiment rose 10.6% over March to 65.7, but remains down 25.6% YOY, according to preliminary results from the University of Michigan Survey of Consumers.
“Consumer Sentiment jumped by a surprising 10.6% in early April, although it remained below January's reading and lower than in any prior month in the past decade,” says Survey of Consumers chief economist, Richard Curtin. “Nearly the entire gain was in the Expectations Index, which posted a monthly gain of 18.0%, including a leap of 29.4% in the year-ahead outlook for the economy and a 17.2% jump in personal financial expectations. A strong labor market bolstered wage expectations among consumers under age 45 to 5.3%-the largest expected gain in more than three decades, since April 1990. Consumers still anticipate that the national unemployment rate will inch downward, acting to improve consumers' outlook for the national economy. Perhaps the most surprising change was that consumers anticipated a year-ahead increase in gas prices of just 0.4 cents in April, completely reversing March's surge to 49.6 cents. Retail gas prices have fallen since the March peak, and that fact was immediately recognized by consumers. The shift in gas price expectations may be partly due to Biden's announced release of strategic oil reserves and the relaxing of some seasonal EPA rules. Nonetheless, the April survey offers only tentative evidence of small gains in sentiment, which is still too close to recession lows to be reassuring. There are still significant sources of economic uncertainty that could easily reverse the April gains, including the impact on the domestic economy from Putin's war, and the potential impact of new covid variants.”