Preliminary data released by the University of Michigan on Thursday unexpectedly showed a substantial improvement in U.S. consumer sentiment in the month of April.
The report showed the consumer sentiment index spiked to 65.7 in April from 59.4 in March. The sharp increase surprised economists, who had expected the index to edge down to 59.0.
The consumer sentiment index rebounded from its lowest level since August 2011 amid an improvement in consumer expectations, with the expectations index surging to 64.1 in April from 54.3 in Mach.
“Consumers still anticipate that the national unemployment rate will inch downward, acting to improve consumers’ outlook for the national economy,” said Surveys of Consumers chief economist Richard Curtin.
He added, “Perhaps the most surprising change was that consumers anticipated a year-ahead increase in gas prices of just 0.4 cents in April, completely reversing March’s surge to 49.6 cents.”
The report also showed the current economic conditions index inched up to 68.1 in April from 67.2 in the previous month.
“Nonetheless, the April survey offers only tentative evidence of small gains in sentiment, which is still too close to recession lows to be reassuring,” Curtin said.
He added, “There are still significant sources of economic uncertainty that could easily reverse the April gains, including the impact on the domestic economy from Putin’s war, and the potential impact of new covid variants.”
On the inflation front, one-year and five-year inflation expectations were unchanged at 5.4 percent and 3.0 percent, respectively.
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