The Thomson Reuters/University of Michigan Consumer Sentiment Index slipped from a March reading of 91 to an April reading of 89. The index reached 95.9 in April of last year.
Economists polled by Bloomberg were expecting an April reading of 90.4.
All the decline for the month came in the expectations portion of the index, which tumbled from 81.5 in March to 77.6 in April. A year ago the expectations index stood at 88.8.
The current conditions index rose from 105.6 in March to 106.7 in April, nearly equal to the 107 reading from April 2015.
Across all households during the first half of 2015, an income increase of 1.5% was expected, down from 2.5% in the first half of 2007.
The survey’s chief economist, Richard Curtin, said:
The size of the decline, while troublesome, is still far short of indicating an impending recession. The decline is all the more remarkable given that consumers’ assessments of current economic conditions, including their personal finances, have remained largely unchanged at very positive levels during the past year. This divergence may reflect the strength of the consumer relative to the business sectors, and exacerbated by growing uncertainty about the economic policies advocated by various presidential candidates.
Even though consumers are not particularly optimistic about the future, that could change quickly because neither do consumers expect a sharp downturn anytime soon. It could be that people just don’t see even modest gains coming even though wage growth continues to outpace inflation. That feeling may be partly due to gasoline prices rising above $2 a gallon again in most parts of the country.
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