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The preliminary University of Michigan Consumer Sentiment Index for April slipped into reverse, taking back solid gains posted in the months of February and March. Volatility in the equity markets caused by the president’s trade policies weighed heavily on consumers’ views.

Rising interest rates also played a role in consumers’ outlook.

The preliminary results for the April index slipped from a final March reading of 101.4 to a reading of 97.4, a 3.6% month-over-month increase. Economists polled by Bloomberg were expecting a first April reading of 101.0.

The month-over-month consumer expectations sub-index fell from 88.8 to 86.8 (2.3%) and the current conditions sub-index tumbled from 121.2 to 115.0 (5.1%).

Year over year, the consumer sentiment index is up 0.8%, the current conditions sub-index is up 2.0% and the consumer expectations sub-index is down 0.2%.

The survey’s chief economist, Richard Curtin, said:

Consumer sentiment slipped in early April, largely reversing the gains recorded in the prior two months. 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. Uncertainty surrounding the evolving trade policy has caused many small (and at times inconsistent) changes in expectations. Spontaneous references to trade policies were made by 29% of all consumers in early April, with nearly all the mentions negative (27% out of 29%). The Expectations Index was just 64.2 among those who made negative comments about trade policies, while among those who made no mention of trade policies, the Expectations Index was 93.9, a substantial difference. Consumers who negatively mentioned trade policies also anticipated that the year-ahead inflation rate would be 0.4 percentage points higher than among those who did not spontaneously mention Trump’s trade policies; there was a differential of 0.2 percentage points for long term inflation expectations. There were other factors responsible for the small overall April decline, the most important was 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.