Consumer confidence is taking a hit in the U.S., marking the fourth month in a row of declining sentiment. This drop seems tied to fears surrounding President Trump’s trade wars, which have left many worried about job security and rising prices.
According to the University of Michigan’s consumer sentiment index, confidence fell by 11% in April, reaching a score of 50.8—the lowest level since the early days of the COVID-19 pandemic. Over the past year, this index has plummeted by 34%. It shows that people from all demographics—age, income, education, and political affiliation—are feeling more anxious.
One notable trend is the growing expectation of job losses. For five consecutive months, more people have predicted rising unemployment, with current expectations the highest since the Great Recession of 2009. This shift in sentiment isn’t just about personal feelings; it often reflects public attitudes towards government leadership. Interestingly, even among Republicans, confidence dipped by 6% last month, likely due to the turbulence surrounding tariffs.
In a recent statement, James Knightley, the chief international economist at ING, noted that 67% of respondents feel the government is not handling inflation and unemployment well, while only 18% believe it is doing a good job. This dissatisfaction adds to the unease.
White House Press Secretary Karoline Leavitt urged Americans to trust Trump’s handling of tariffs, claiming it’s a transitional period. However, the tariffs themselves range from 10% on most countries to 25% on goods from Canada and Mexico. China retaliated with hefty tariffs of its own, creating a complex web of trade tensions.
Economic analysts are watching these developments closely. Larry Fink, CEO of BlackRock, shared his outlook that the U.S. might already be in a recession. The financial markets show signs of distress, evidenced by the rising interest rate on 10-year Treasury notes, currently at 4.48%, up from about 4% a week prior. This indicates potential instability for investors.
Meanwhile, long-term inflation expectations have surged, currently sitting at 4.4%. This is concerning for the Federal Reserve, which closely monitors inflation trends. If people believe prices will rise, they may start spending more now or asking for higher wages, potentially creating a self-fulfilling prophecy.
Historically, consumer sentiment has a strong link to spending behavior. While people have continued to spend despite negative feelings in recent years, rising concerns about job security may cause them to cut back. David French, a senior executive at the National Retail Federation, highlighted how the uncertainty around tariffs is creating a “paralysis” in hiring decisions, contributing to widespread anxiety.
Overall, it’s a challenging time that requires careful navigation for businesses and consumers alike. As one economist put it, a shift in tariffs and trade agreements can produce lasting impacts on the economy. While some experts see hopeful signs of recovery, others remain cautious, warning that the situation could worsen if consumer confidence doesn’t bounce back soon.
For more information on consumer sentiment trends, you can read the full report from the University of Michigan here.
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Donald Trump, Larry Fink, Karoline Leavitt, Joe Biden, Joanne Hsu, International trade, Federal Reserve System, General news, Tariffs and global trade, Harry Chambers, Canada, Inflation, David French, Jobs and careers, Business, Economic policy, U.S. news, Mexico, U.S. Republican Party, China, James Knightley, United States government, Trump Media
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