Rising wages drives both optimism, pessimism on inflation

April 29, 2022

Contact:
Bernie DeGroat, 734-647-1847, bernied@umich.edu
Surveys of Consumers, 734-763-5224

ANN ARBOR—Consumers voiced much more positive views in April, rising 9.8% above March, according to the University of Michigan Surveys of Consumers.

Most of the surge was concentrated in expectations, with gains of 21.6% in the year-ahead outlook for the economy and an 18.3% jump in personal financial expectations, said U-M economist Richard Curtin, director of the surveys.

The cause was a sharp drop in gas price expectations, falling to just 0.4 cents from last month’s 49.6. The declines in gas prices may be reversed by ongoing developments in Ukraine, he said. The overall impact on sentiment trends, however, was quite small: Other than the last two months, the Sentiment Index in April was still lower than in any prior month in the past decade.

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