Consumer Sentiment Remains High in April -- Update
April 28 2017 - 11:59AM
Dow Jones News
By Austen Hufford
Consumer sentiment about the U.S. economy remained high in
April, even as the Commerce Department said U.S. economic output
increased at the slowest pace in three years.
The University of Michigan said Friday that its final reading of
consumer sentiment was 97 in April, compared with March's final
reading of 96.9 and April's initial reading of 98. It is up 9% from
April 2016.
Economists surveyed by The Wall Street Journal had expected an
April final reading of 97.9.
The index reflecting sentiment on current economic conditions
rose 5.6% to 112.7 from last April as the index of expectations
rose 12% from a year ago to 87.
The recent rise in optimism, which saw a boost after President
Donald Trump's election in November, reflects a turnaround from
consumers' attitudes in October, when sentiment had matched a
two-year low.
Friday's report also highlights the gap between "hard" and
"soft" economic data. Soft data comprises various poll-driven
reports, such as consumer confidence and business surveys while
"hard" data comprises economic reports that measure actual
activity, such as retail sales and durable-goods orders.
The Commerce Department said that gross domestic product, the
broadest measure of goods and services produced in the U.S., rose
0.7%, at a seasonally adjusted annual rate, in the January through
March quarter.
Inflation expectations, a measure closely watched by the Federal
Reserve, remained steady in April. Consumers said they expect
inflation of 2.5% in the coming 12 months and 2.4% in the coming
five years, both figures equaling their March values.
The Fed in March voted to raise short-term interest rates and it
is expected to push for additional rate increases if economic
conditions continue to improve.
As in recent months, the survey also showed continued widespread
disagreement about future U.S. economic prospects along political
party lines.
"Although the partisan divide has slightly narrowed in recent
months, it still reflects a very pessimistic economic outlook among
Democrats and a very optimistic outlook among Republicans," said
Richard Curtin, the survey's chief economist. "Selective perception
of news is the driving force behind the partisan divide."
Republicans cited favorable economic developments while
Democrats reported on negative economic news. This divide will
continue to add uncertainty and instability to consumer spending,
Curtin said.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
April 28, 2017 11:44 ET (15:44 GMT)
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