US consumer sentiment slips in April amid trade war fears
Consumer sentiment in the US deteriorated in April amid trade war worries, according to data from the University of Michigan.
The consumer sentiment index fell to 97.8 from 101.4 in March, but was up from a reading of 97.0 in April last year.
Meanwhile, the current economic conditions index declined to 115.0 from 121.2 in March, but was higher than the 112.7 from April last year.
The index of consumer expectations printed at 86.8 in April from 88.8 last month and 87.0 in the same month a year ago.
Surveys of Consumers chief economist Richard Curtin said: "Consumer sentiment slipped in early April, largely reversing the gains recorded in the prior two months. The small decline was widely shared by all age and income subgroups and across all regions of the country. Importantly, confidence still remains relatively high, despite the recent losses that were mainly due to concerns about the potential impact of Trump's trade policies on the domestic economy. Uncertainty surrounding the evolving trade policy has caused many small (and at times inconsistent) changes in expectations.
“Overall, the data are consistent with a growth rate of 2.7% in consumption from mid-2018 to mid-2019.”
Capital Economics said the headline reading was weaker than the consensus estimate of 100.5 but roughly in line with its own forecast.
US economist Andrew Hunter said that despite the drop, the University of Michigan consumer confidence index remains at a high level by past standards and suggests that the slowdown in spending growth at the start of this year will prove to be a blip.
"The past relationship hasn’t always been close, but at face value the survey is now consistent with real consumption growth accelerating to more than 4% annualised," he said.
"We had suspected that the recent trade spat with China and associated volatility in equity prices might have weighed on sentiment, particularly with gasoline prices trending higher in recent weeks. It therefore wasn’t a huge surprise to see the expectations sub-index drop back to 86.8, from 88.8."