U.S. Consumer Sentiment Slumps To Seven-Month Low In April

Reflecting weakening expectations for future growth, the University of Michigan released a report on Friday showing that U.S. consumer sentiment deteriorated by more than previously estimated in April.

The report said the final reading on the consumer sentiment index for April came in at 89.0, reflecting a downward revision from the mid-month reading of 89.7.

The downward revision came as a surprise to economists, who had expected the index to be upwardly revised to 90.4.

With the downward revision, the index is well below the final March reading of 91.0 and at its lowest level since hitting 87.2 last September.

The decrease by the headline index primarily reflected a steep drop by the index of consumer expectations, which tumbled to a downwardly revised 77.6 in April from 81.5 in March.

Richard Curtin, the survey's chief economist, said the size of the decline was troublesome but still far short of indicating an impending recession.

Meanwhile, the report also said the current economic conditions index climbed to an upwardly revised 106.7 in April from 105.6 in March.

"This divergence may reflect the strength of the consumer relative to the business sectors, and may have been exacerbated by growing uncertainty about the economic policies advocated by various presidential candidates," Curtin said.

He added, "Overall, the data indicate that inflation-adjusted personal consumption expenditures will grow by 2.5% in 2016."

On the inflation front, the one-year inflation outlook ticked up to 2.8 percent in April from 2.7 percent in March, while five-year inflation expectations dropped to 2.5 percent from 2.7 percent.