Welcome to Board's, US Economic Outlook for April.

My name is Natalie Gallagher.

I am principal economist here at board

to lead up our economic research,

and today I'm going to walk you

through the latest consumer sentiment numbers

and how they will inform the next 12 to 18 months

of spending in the US economy.

Now, consumer sentiment significantly deteriorated in April,

falling to 50.8,

which is actually the second lowest reading throughout the

history of the dataset.

Second only to a reading that we got during the pandemic,

which was a little bit closer to 50,

and this marks the fourth consecutive month

of falling consumer sentiment

and reflected a pervasive drop across all demographics.

So that is by age, income,

education region, even by political affiliation,

which really highlights the widespread nature

of current economic pessimism in the United States in

conjunction with deteriorating sentiment,

we also saw inflation expectations surge

to their highest level since 1981, which was a period marked

by double digit inflation and general economic instability.

Now, consumer sentiment numbers

for the preliminary release were conducted

between March 25th

and April 8th, meaning that they were sort of the perfect

or ideal time range to really capture

how households were feeling about the ongoing trade

negotiations and sort of escalation of the trade war.

These policies overall have really exacerbated fears

of prolonged inflationary pressure as well

as economic stagnation.

So I'm showing you the expected inflation over the next 12

months, but if I also showed you the expected inflation over

the next five years, you would see a very similar spike,

meaning that consumers households are not just expecting

this to be a short-term issue,

but a much more prolonged issue for the US economy.

Unemployment expectations also rose sharply

for the fifth consecutive month

reaching levels not seen actually since the Great Recession.

Now, historically, concerns of this magnitude

have driven precautionary savings behavior from households,

meaning that they've really pulled back amidst sort

of this labor market uncertainty together, these factors, so

deteriorating sentiments, surging inflation expectations,

and rising unemployment fears

underscore the heightened economic uncertainty

that's really weighing on consumers right now.

This uncertainty is not only likely

to shape spending patterns,

but also amplify cautious financial behaviors

that ripple through the broader economy

to a multitude of magnitudes.

Now, while inflation expectations traditionally

stimulate spending on durable goods like electronics

and vehicles, and that's because

Consumer is planning to buy an item anyways,

and they expect prices to be higher in 90 days from now,

say, they may say, Hey, I'm actually gonna move up

that purchase because I'm gonna buy it

today at a lower price.

Now it's unlikely that this is going

to take effect this time around because it's anticipated.

That will be significantly muted

by the elevated unemployment fears,

which ties up quite a lot of uncertainty

around income trajectories.

Now, the combination, again, of deteriorating sentiment,

surging inflation, and rising unemployment expectations,

they actually suggest a shift towards a much more

defensive consumer, a consumer that's going

to focus more on necessities

and value based purchases in this environment,

in this uncertain environment.

It's not just uncertain for us as economists, right?

It's also very uncertain for the consumer,

for the businesses as well, marked by trade tensions

and political instability, I should say, policy instability.

Businesses that can effectively communicate their value

proposition and respond to a much more uncertain

and cost conscious customer are going

to be much better positioned than their peers to really

take advantage of the opportunity that's presented to them

to maximize growth

and minimize risk given the economic trajectory

that they are now experiencing.

Now, this is a lot of information that is at your disposal,

a lot of economic data,

and of course every industry, every business is going

to respond a little bit different

to the economic trajectory.

So if you would like to learn

how board can help you navigate these challenges

or implement external drivers into your underlying forecast,

then visit board.com and reach out for a demo.

With that, I just wanna say thank you for your time.

I very much appreciate it, and I will see you.