US consumer sentiment falls as economic outlook weakens
US consumer sentiment fell in April for the first time in three months, as the outlook of American consumers on the US economy dropped to the lowest in more than a year and the impact of tax cuts waned.
The University of Michigan’s preliminary sentiment index decreased to 96.9 from the prior month’s 98.4, according to a report Friday.
The measure of current conditions rose to a four-month high of 114.2, while expectations for future economic conditions fell to 85.8.
“Consumer confidence continued its sideways shuffle in early April, posting an insignificant decline following the small gain recorded last month,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.
The decline in sentiment reflected a weakening outlook for the economy, with a gauge of views for five years out falling to the lowest level since January 2018.
“Following volatility surrounding the government shutdown, consumer sentiment has rebounded, but has so far failed to find a consistent upward path,” Bloomberg economist Eliza Winger said.
Meanwhile, a separate economic indicator that measures consumer optimism fell last month, offering more evidence of a sharp slowdown in economic activity early in the year.
A recent report from the US Conference Board showed its consumer confidence index fell 7.3 points to a reading of 124.1 in March.
The confidence survey showed fewer consumers describe business conditions as "good" and less see jobs as "plentiful," and those same shifts were reflected in the outlook for six months in the future.
The US economy is facing rising headwinds, including slowing global growth, fading fiscal stimulus, trade tensions and uncertainty over Britain’s departure from the European Union.
US economic growth slowed sharply in the fourth quarter last year to an annual rate of just 2.2 percent. The GDP growth was less than initially thought, which was estimated in February to be 2.6 percent.
US President Donald Trump has emphasized that last year’s GDP performance as evidence that the administration’s policies of tax cuts, deregulation, government spending and tougher trade enforcement were working.
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