The University of Michigan’s Consumer Sentiment Index has been around since 1952. The current index is at its lowest point since 1981. Respondents’ expectation for inflation a year from now is a staggering 6.7%, or about what occurred after the COVID crisis. So if voters didn’t like the high inflation of the Biden economy when supply chains were broken causing those massive price spikes, they’re probably going to dislike the Trump economy even less, as the economic pain is entirely self-inflicted this time.
Source: CNBC
Consumer sentiment grew even worse than expected in April as the expected inflation level hit its highest since 1981, a closely watched University of Michigan survey showed Friday.
The survey’s mid-month reading on consumer sentiment fell to 50.8, down from 57.0 in March and below the Dow Jones consensus estimate for 54.6. The move represented a 10.9% monthly change and was 34.2% lower than a year ago. It was lowest reading since June 2022 and the second lowest in the survey’s history going back to 1952.
As sentiment moved lower, inflation worries surged.
Respondents’ expectation for inflation a year from now leaped to 6.7%, the highest level since November 1981 and up from 5% in March. At the five-year horizon, the expectation climbed to 4.4%, a 0.3 percentage point increase from March and the highest since June 1991.
Bloomberg’s Michael Wiesenthal noted that in the survey that we’re even starting to see an uptick among Republicans who believe that economic conditions are worsening.
As always, the idea for the picture above was stolen from Michael DeAdder.