Investing.com – U.S. consumer sentiment pulled back in April from what had been its highest level since 2004 in the previous month as Americans became concerned over future trade agreements, according to a report published on Friday.
The preliminary publication of the data for April from the University of Michigan's Consumer Survey Center showed that consumer sentiment fell to 97.8 last month.
That was compared to March’s 14-year high of 101.4.
Analysts had forecast a drop to just 100.6.
The current conditions indicator decreased to 115.0 in April, from the previous 121.2.
Economists had projected that the index would fall to only 120.0.
Furthermore, consumer expectations dropped to 86.8 in April, from the prior reading of 88.8.
That missed consensus that had expected a decline to 88.1.
Meanwhile, inflation expectations for the next 12 months fell to 2.7% from 2.8%, while the five-year gauge declined to 2.4% from the previous 2.5%.
The survey’s chief economist Richard Curtin indicated that 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,” he explained.
“Uncertainty surrounding the evolving trade policy has caused many small (and at times inconsistent) changes in expectations,” Curtin added.
This expert said that spontaneous references to trade policies in the survey were made by 29% of all consumers in early April, with nearly all the mentions negative.
Curtin further noted that there were other factors responsible for the small overall April decline and highlighted the expectation of rising interest rates, which slightly slowed the anticipated pace of growth in the economy.
“Overall, the data are consistent with a growth rate of 2.7% in consumption from mid-2018 to mid-2019,” he concluded.