US consumer sentiment decreases slightly as inflation outlook deteriorates | Business News

Consumer sentiment about the U.S. economy has dipped slightly but remains relatively high, according to the latest data from the University of Michigan. The consumer sentiment index fell to 77.9 this month, down from 79.4 in March, reflecting Americans’ cautious outlook amidst the upcoming election.

Joanne Hsu, director of the consumer survey, noted that consumers are holding back judgment on the economy due to the uncertainty surrounding the election and its potential impact. The index had experienced a significant drop to 61.3 in November before rebounding in the following months, signaling a rollercoaster of sentiment among Americans.

Despite the slight decline, economists remain optimistic about consumer spending and the overall economic outlook. Oren Klachkin, an economist at Nationwide, highlighted that sentiment is still on an upward trend, creating a positive environment for consumers.

However, factors such as rising gas prices and inflation expectations have contributed to the cautious sentiment among consumers. The average national price of gas has increased by 7% in the past month, reaching $3.63 per gallon. Additionally, consumers anticipate inflation to be 3.1% in the next year, exceeding the Federal Reserve’s target of 2%.

While inflation has decreased from its peak in 2022, it remains elevated this year, with prices excluding food and energy costs rising by 3.8% in March. Despite these challenges, economists believe that as long as the job market remains strong, consumer spending will continue to support the economy.