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<p>Consumer optimism has been held down by the pandemic over the past year, but attitudes have started to improve as COVID-19 disruptions begin to fade.&nbsp; Consumer Sentiment from the University of Michigan jumped to the highest level in over a year in April –due in large part to improvements in the labor market– which should be supportive of the economic recovery in the months ahead.&nbsp;</p>
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<p>While the rebound in Consumer Sentiment is a positive development, the fact that consumers’ inflation expectations have climbed to an 8-year high is a major concern.  The University of Michigan expressed their concern over this trend by stating that “<em>contingency plans are urgently needed to avoid declining inflation-adjusted incomes and surging interest costs.</em>” In other words, the Federal Reserve and the federal government should be prepared to combat rising inflation as it is becoming a greater possibility.  We concur.</p>
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