Mid-Month Survey Results

The mid-month consumer sentiment index fell to 50.8 in April, a drop from March’s 57.0 and substantially lower than the Dow Jones forecast of 54.6. This represents a considerable decrease of 10.9% month-over-month and is down 34.2% from the same period last year, marking the lowest sentiment index since June 2022.

Rising Inflation Concerns

Accompanying the sentiment decline, inflation concerns have escalated. Respondents to the survey expect inflation to be at 6.7% one year from now, the highest prediction since November 1981, rising sharply from March’s 5%. For a five-year forecast, expectations have climbed to 4.4%, the highest since June 1991.

Additional Economic Indicators

Other components of the survey also indicated worsening perceptions of economic conditions:

• The current economic conditions index decreased to 56.5, marking an 11.4% decline from March.
• The expectations index fell to 47.2, a 10.3% drop and the lowest since May 1980.

Year-over-year, these two indices have seen declines of 28.5% and 37.9%, respectively.

Market Reactions

The report’s release negatively impacted stock markets, with indices turning lower and Treasury yields continuing to rise. Economic experts noted that consumers have transitioned from anxiety to a state of fear regarding their financial outlook.

“Consumers have spiraled from anxious to petrified,” stated Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

Broad-Based Declines Across Demographics

Joanne Hsu, the survey director, noted that sentiment declines occurred across all demographic segments—age, income, and political affiliation. She emphasized that consumers are signaling multiple economic warning signs that elevate the likelihood of a recession.

Outlook and Concerns

Amid the growing fears surrounding rising unemployment—now at its highest level since 2009—the survey results come at a time when there are rising concerns about potential economic impacts from political decisions, particularly regarding tariffs introduced under President Donald Trump. Analysts are divided, with many suggesting the U.S. economy could face significant recession risks in the coming year.

It is noteworthy that the survey was conducted between March 25 and April 8, concluding just before Trump announced a freeze on aggressive tariffs against various trading partners.