US Economy: US consumer sentiment is deteriorating

US consumer sentiment is deteriorating

In the US, consumer sentiment is worse than expected. Inflation expectations continue to rise.

Published today at 4:38 pm

Consumers still face rapidly rising costs of living.

Photo: Eva Marie Uzcategui/Bloomberg

Consumer sentiment in the US worsened more than expected in April. The barometer fell 1.5 points to 77.9, the University of Michigan reported Friday in its monthly survey. Experts polled by Reuters had expected a drop to 79. Consumers rated their situation worse in April compared to the previous month and rated the outlook as slightly less rosy.

Consumers' inflation expectations have risen: Looking ahead to the next twelve months, they expect the inflation rate for goods and services to be 3.1%. In March, consumers rated only 2.9%.

Although the US Federal Reserve (Fed) has countered this strongly with its high interest rate policy, they still face rising costs of living. Inflation rose to 3.5% in March from 3.2% in February. Because of sluggish inflation, financial markets expect the central bank to delay its first interest rate cut for a few more months — perhaps even until late summer. It currently keeps the key interest rate at 5.25% to 5.5%.

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Reuters

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