REAL ECONOMY BLOG | April 12, 2024
Authored by RSM US LLP
Consumer sentiment in the United States ticked down in April in a sign of the impact of rising inflation, particularly gasoline prices, over the past three months.
The consumer sentiment index fell to 77.9 from 79.4, according to the University of Michigan survey on Friday.
While the index is just one of many inflation expectation indexes that the Federal Reserve monitors, the increase in the survey’s inflation outlook should add another reason for the more hawkish tone the Fed has taken recently.
The inflation outlook for the next 12 months rose to 3.1% from 2.9%, while the longer-term outlook also rose, to 3.0% from 2.8%.
Consumers, expecting stickier-than-anticipated inflation and higher interest rates, signaled less appetite for spending. All subindexes for spending plans dropped on the month.
Given the recent unfavorable economic data, the risk of the Fed’s first rate cut being pushed to July or later is increasing.
This article was written by Tuan Nguyen and originally appeared on 2024-04-12. Reprinted with permission from RSM US LLP.
© 2024 RSM US LLP. All rights reserved. https://realeconomy.rsmus.com/consumer-sentiment-falls-as-inflation-stays-sticky/
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