Consumer sentiment about the US economy has experienced a slight decline in April, according to the preliminary version of the University of Michigan's consumer sentiment index. The index slipped to 77.9 this month, down from the March figure of 79.4. However, sentiment remains near its recent high and is largely unchanged so far this year.

The consumer sentiment index, which has been conducted since 1980, serves as a measure of consumers' outlook on the economy. It currently sits between its all-time low reached in June 2022 when inflation peaked, and its pre-pandemic averages.

Joanne Hsu, the director of the consumer survey, noted that consumers are reserving judgment about the economy due to the upcoming election, which is perceived to have a substantial impact on the economy's trajectory.

The index notably dropped to 61.3 in November before experiencing a significant jump in the following two months, the largest increase in over three decades. Since then, consumer sentiment has mostly moved sideways.

Despite the slight decline, economists remain optimistic about consumer spending, which is vital for a robust economy. Stronger consumer optimism often translates into increased spending. As long as the job market stays strong, most economists expect consumer spending to remain healthy.

Oren Klachkin, an economist at Nationwide, stated in a research note that sentiment remains on a rising trend, emphasizing that it is still a positive environment for consumers.

The survey revealed that sentiment experienced the largest decline among Republicans, a slight dip among independents, and a small increase among Democrats. Over the years, Americans' economic views have become more influenced by political partisanship.

A possible contributing factor to the decline in consumer sentiment is the increase in gas prices. According to AAA, the average national price of a gallon of gas has risen by about 7% in the past month, reaching $3.63 per gallon.

Furthermore, consumers have also become more concerned about future inflation, likely due to the persistence of high prices. The survey showed that Americans expect inflation to be around 3.1% a year from now, exceeding the Federal Reserve's 2% target. However, it is important to note that this projected rate would still be lower than the current level of 3.5%.

Although inflation has decreased from its peak of 9.1% in the summer of 2022, it has remained elevated throughout this year. In March, prices excluding food and energy costs rose by 3.8% compared to the previous year, remaining above the Fed's target.

Overall, while consumer sentiment experienced a slight dip in April, it remains positive and close to recent highs. The upcoming election and concerns about inflation and gas prices seem to have influenced consumers' economic outlook. Economists remain optimistic about consumer spending as long as the job market remains strong.