Consumer sentiment hit an eight-month low this month amid rising gasoline prices and inflation fears and a troubled housing market, according to the Reuters/University of Michigan Surveys of Consumers report released today.
The Consumer Sentiment Index declined for the third month in a row, to 85.3 points from March’s 88.4. The April reading – the lowest since August’s 82.0 points – fell short of the 87.5-point mean prediction from a survey of 59 economists by Bloomberg News.
Consumers in the survey predicted inflation would rise. They forecast an inflation rate one year from now of 3.3 percent – the highest since the August survey – compared with last month’s one-year prediction of 3.0 percent, Bloomberg said.
The survey’s consumer expectations index, considered an indicator of future spending, fell to 74.3 points – the lowest since August – from March’s 78.7 points. That’s bad news for the U.S. economy, where consumer spending accounts for two thirds of all activity.
“We are in for a period of pretty tepid consumer spending in the spring because of the gasoline prices,” Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Conn., had told Bloomberg before the report’s release.
The Reuters/University of Michigan Surveys of Consumers is produced each month by the University of Michigan and distributed by Reuters. Additional information is available at www.sca.isr.umich.edu.
