Consumer sentiment continues to be negatively affected by persistently high inflation, according to the latest survey of Americans' feelings about the economy.
The University of Michigan's closely watched Consumer Sentiment Index for April landed at 63.5, a mere 1.5 points higher than the previous month.
The mild improvement in consumer sentiment that we saw during the fall and winter of last year appears to be stalled. Consumers expect the labor market will weaken," Joanne Hsu said in a Friday statement.
She added that "sustained, meaningful improvement in economic conditions - which will come from cooling the inflation, given the limited room for strengthening labor markets - will be needed for their confidence to rise again."
According to another important federal report released on Friday, the inflation rate is still rising, but it's easing. Consumer spending is also easing.
After a strong January, the Commerce Department's Personal Income and Outlays Report -- which includes the Federal Reserve favorite inflation indicator as well as an overall picture of how much Americans earn, spend and save -- revealed that consumer spending growth had slowed down and was even flat in March.
According to the report, housing and health care expenses accounted for the largest increase in consumer spending during March. The report shows that consumers have cut back on almost every area except for spending more at restaurants and service businesses.
Tim Quinlan is senior economist at Wells Fargo. He said, "This consumer is retrenching." "This isn't a consumer who has a devil may care attitude and will spend no matter what."
Bernard Yaros is an economist with Moody's Analytics. He said that although spending has moderated there are no broader signs of a more alarming decline.
In March, both the real disposable income and personal savings rate increased. Separately a report released Friday by the Bureau of Labor Statistics revealed a 1.2% increase in wages and benefits for workers during the first three months.