Consumer expectations have fallen 32% since January.
While corporate earnings have been stronger than expected and inflation rates have ticked downward, consumers are growing increasingly concerned about the economy.
That was evident in the latest results from the University of Michigan’s monthly Surveys of Consumers.
This closely watched gauge of consumer sentiment dropped to 52.2 in April, which is down 8% from a score of 57.0 in March. Further, it has fallen for four straight months and is down 29% since the beginning of 2025. It is also down 32% compared to April 2024.
The 52.2 score is the lowest since July of 2022.
“Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead,” Surveys of Consumers Director Joanne Hsu said. “Labor market expectations remained bleak. Even more concerning for the path of the economy, consumers anticipated weaker income growth for themselves in the year ahead.”
Consumers’ expectations plummet
The survey is split into two broad categories, the index of Current Economic Conditions and the index of Consumer Expectations. The former had a score of 59.8% in April, down about 24%. The latter, which is based on consumers’ expectations for the months ahead, dipped 10% from March and 38% year-over-year to a score of 47.3.
The 32% decline in consumer expectations since January is the steepest three-month drop since 1990 when the economy was in recession.
The pessimistic view is colored by concerns about tariffs, which went into effect on April 2, and their impact on inflation.
That’s why inflation expectations for the next year surged from 5.0% last month to 6.5% in April, the highest reading since 1981. It is also the fourth straight month of unusually high increases in expectations of at least 0.5 percentage points. Also, the April jump was seen across all political affiliations.
The longer-term five-year expectations for inflation also rose, to 4.4% from 4.1% in March.
Blame it on the tariffs
These results jibe with a survey released April 24 from the AP and the National Opinion Research Center (NORC) at the University of Chicago.
The AP-NORC survey found that 76% of Americans believe that the Trump administration’s tariff policies will increase the cost of consumer products.
Further, 52% of those surveyed said they oppose tariffs in general and 59% say the president has gone too far with the tariffs.
In addition, 61% said they are concerned about the cost of groceries while roughly 50% are worried about an economic recession and the cost of expensive items.
