Consumer sentiment fell for the fourth straight month, plunging 8% from March and reaching its lowest reading since July 2022.
While the April decline in current conditions was relatively modest, the expectations index plummeted with drop-offs in personal finances as well as business conditions, said economist Joanne Hsu, director of the University of Michigan's Surveys of Consumers.
Expectations have fallen a precipitous 32% since January, the steepest three-month percentage decline seen since the 1990 recession. While this month's deterioration was particularly strong for middle-income families, views of the economic outlook in both the short and long run worsened for vast swaths of the population across age, education, income and political affiliation.
"Consumers perceive 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 on the horizon," Hsu said. "Most concerning for the path of the economy, consumers anticipate weaker income growth in the year ahead. Without reliably strong incomes, spending is unlikely to remain robust amid the numerous warning signs noted by consumers."
Widespread unease about trade policy
Consumers expressed intensifying unease about economic policy developments. About 60% of consumers this month spontaneously mentioned tariffs during interviews, up sharply from 44% in March.
This month's figure includes the 59% of Independents and 44% of Republicans who referenced tariffs, showing that these tariff concerns are widespread and span the political spectrum, Hsu said.
Critically, these consumers generally expect tariffs to generate substantial upward pressure for inflation in the future and to weaken the outlook for economic growth as well. While consumers may have seen the April 9 announcement of a partial pause on tariff increases as a positive development, the announcement was not enough to settle consumers' concerns over the potential impact of trade policy on the economy, Hsu said.
Labor market outlook remains bleak
Nearly two-thirds of consumers expect unemployment to rise in the year ahead, more than double the reading from six months ago. In an alarming development, consumers are increasingly worried that their income prospects may be worsening as well, Hsu said.
Less than half of consumers expect their own incomes to grow in the year ahead, down from nearly 60% half a year ago. About 67% of consumers expect that the purchasing power of their incomes will be eroded over the next year, up from 59% in October 2024.
Consumer Sentiment Index
The Consumer Sentiment Index fell to 52.2 in the April 2025 survey, down from 57.0 in March and below last April's 77.2. The Current Index fell to 59.8, down from 63.8 in March and below last April's 79.0. The Expectations Index fell to 47.3, down from 52.6 in March and below last April's 76.0.
About the surveys
The Surveys of Consumers is a rotating panel survey at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that gives each household in the coterminous U.S. an equal probability of being selected. Interviews are conducted throughout the month by web. The minimum monthly change required for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Index and Expectations Index, the minimum is 6 points.
