The numbers: The University of Michigan’s gauge of consumer sentiment rose in April to 65.7, a more than 10% increase from March’s reading of of 59.4 as Americans anticipated gasoline prices to remain steady over the next year.
Economists were expecting a print of 59, according to a survey by the Wall Street Journal.
Americans’ expectations for overall inflation over the next year held steady at 5.4% in March while expectations for inflation over five years remained at 3.0%.
Big picture: Sentiment rebounded, but remained below levels seen in January and in any month in the 10 years before that.
Americans fear the cost of living will continue to rise over the next year even if they are less fearful of a surge in prices at the pump, with inflation expectations for the next year remaining at 40-year highs.
A strong labor market means that consumers under the age of 45 expect a 5.3% increase in their wages this year, almost enough to keep up with inflation expectations.
“Consumers still anticipate that the national unemployment rate will inch downward, acting to improve consumers’ outlook for the national economy,” Richard Curtin, the survey’s chief economist wrote.
“Retail gas prices have fallen since the March peak, and that fact was immediately recognized by consumers,” he added. “The shift in gas-price expectations may be partly due to Biden’s announced release of strategic oil reserves and the relaxing of some seasonal EPA rules.”
Key details: A gauge of consumer’s views of current conditions rose to 68.1 in April from 67.2 in March, while an indicator of expectations for the next six months rose to 64.1 from 54.3 in the previous month.