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Consumer Sentiment: Modest Decline

April 29, 2022
Bottom Line:  Consumer sentiment fell modestly in the final reading for April. While the April of the University of Michigan's survey index is still higher than in March, the level is historically low, suggesting consumers are uncertain about the economy and their financial prospects. While the outlooks for survey participants tend to correlate with their political affiliation (leaning more positive when the President is from their party), the geopolitical uncertainty with the war in Ukraine and recent shutdowns for Covid in China weighed on most participants regardless of their political affiliation. Moreover, they are heavily influenced by recent changes in gasoline prices -- even the latest small declines in prices at the pump correlated with improved sentiment. Overall, consumer balance sheets are still flush with cash from stimulus funds, but they are also facing uncertainty and worried about how far that will go.
Consumer Sentiment
was REVISED DOWN by 0.5 points in late April to 65.2, compared with market expectations for no change to 65.7. Sentiment has deteriorated by -2.0 points over the past 3 months. With this month's moderate increase, compared to March's final level of 59.4, sentiment is 26.2% BELOW its year-ago level.

Current Conditions
were REVISED UP by 1.3 points to 69.40. Current conditions are now 28.6% BELOW their year-ago level.
Consumer Expectations were REVISED DOWN by 1.6 points to 62.5.   With this month's sharp increase, compared to March's final level of 54.3, expectations are 24.4% BELOW their year-ago level.
Article by Contingent Macro Advisors