Consumer sentiment dropped slightly in the latest University of Michigan survey, with the index registering 96.9 in April, compared to 98.4 in March. Richard Curtin, the survey’s chief economist, said the data suggest that “the impact of the tax reform legislation on consumer confidence has all but disappeared.”
Curtin said that “spontaneous references” to the 2017 tax legislation among survey participants had dropped to a net balance of zero, with 4 percent of respondents saying favorable things about it and 4 percent saying negative things (see the chart below). “The data do suggest that consumers thought that [the tax reform’s] stimulative impact on the overall economy has now run its course,” Curtin wrote.
Nevertheless, consumer sentiment remains elevated, Curtain said, as inflation-adjusted incomes continue to rise.