LIVE MARKETS-April consumer sentiment lifted to gloomy from morose

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APRIL CONSUMER SENTIMENT LIFTED TO GLOOMY FROM MOROSE

The University of Michigan's (UMich) second and final stab at April consumer sentiment USUMSF=ECI showed the mood among consumers wasn't quite as dour as originally reported.

The index was upwardly revised by 2.2 points to 49.8, well to the north of the even 48.0 expected by economists.

Even so, the mood of the American consumer, burdened with about 70% of the U.S. economy, deteriorated by 6.6% from March.

Survey participants' assessments of present conditions and near-term expectations were also upwardly revised, and now reflect monthly declines of 5.9% and 7.0%, respectively.

"After the two-week ceasefire was announced and gas prices softened a touch, sentiment recovered a modest portion of its early-month losses," writes Joanne Hsu, UMich's director of consumer surveys. "The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices.

"In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers."

The graphic below shows consumer expectations currently sit 21.5% below the initial pandemic-related shutdown shock.

The inflation expectations element showed respondents now expect annual price growth of 4.7% a year from now. That's cooler than UMich's preliminary March take, or 1.2 percentage points hotter than the most recent core CPI reading.

Longer-term, consumers expect annual inflation of 3.5% five years from now, hotter than the final March reading of 3.2%.

(Stephen Culp)

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