U.S. consumer morale has dipped but remains at a recent high, with Americans' outlook mostly unaltered this year.
Friday's preliminary University of Michigan consumer mood index fell to 77.9 from March's 79.4. Between its all-time low in June 2022 when inflation spiked and its pre-pandemic averages, sentiment is halfway there. Surveys have been done since 1980.
“Consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the economy,” said consumer survey director Joanne Hsu.
The index plummeted to 61.3 in November before rising by the greatest in over three decades in the following two months. Most of its movement has been sideways.
Consumer optimism can increase spending, which improves the economy. If the employment market maintains solid, most economists expect consumer spending to be strong.
“Looking beyond the recent minor monthly volatility, sentiment remains on a rising trend,” Nationwide economist Oren Klachkin wrote in a research note. “It's still consumer-friendly.”
Republican opinion plummeted most among poll respondents. It fell among independents and rose somewhat among Democrats. Political partisanship has influenced Americans' economic views in recent decades.
This year, inflation has remained high although falling from 9.1% in the summer of 2022. March prices excluding volatile food and energy grew 3.8% from a year earlier, matching the previous month and above the Fed's objective.
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