U.S. April Preliminary Michigan CSI - Not an extreme reaction to the energy shock
The preliminary April Michigan CSI of 47.6 from 53.3 is a record low but the monthly decline of 5.7 points, while significant, is not as large as a 7.7 point fall in March 2025 when tariff worries were building. Inflation expectations are up sharply on a one-year view, and modestly on a 5-10 year view.
The 1-year view of 4.8% is up from 3.8% in March and 3.4% in February, though the acceleration at this point is still less dramatic than a rise above 6% after the tariffs were announced from levels below 3% in late 2024.
The 5-10 year view of 3.4% is up from 3.2% but still well below an acceleration above 4% seen in response to the tariffs. Should the oil shock prove persistent, inflation expectations may have significant upside.
The Michigan CSI breakdown shows current conditions, to 50.1 from 50.8, and expectations, to 46.1 from 51.7, taking similar hits. Current conditions are however well below levels seen immediately after the tariffs but expectations are only marginally below.
