Consumer sentiment plunges amid tariff and inflation worries


Data shows drop in U.S. consumer sentiment



New data shows major drop in U.S. consumer sentiment

04:47

U.S. consumer sentiment swooned in March, with a preliminary gauge released by the University of Michigan on Friday proving far weaker than economists had expected.

The results are “a reflection of the Great Uncertainty around the economic policies put forward by the Trump administration,” commented High Frequency economist Carl Weinberg. “Consumer spending may become restrained by caution until the Trump economic agenda becomes clear.” 

The preliminary results show the index fell to 57.9, compared with 64.7 a month ago, according to the Friday report. Economists had expected consumer confidence to hold relatively steady, according to financial-data company FactSet. 

Consumers anticipate inflation climbing at an annual rate of 4.9% during the next year, their highest expectations since 2022. While inflation abated slightly in February, more Americans are expressing concerns about the economic impact of President Trump’s ongoing trade wars, as tariffs are import taxes paid by companies such as Walmart and Target that are often passed onto consumers through higher prices.

“The klaxon of layoff headlines, a falling stock market and tariff fears were a big blow to consumer confidence in early March,” said Bill Adams, chief economist for Comerica Bank, in an email. “The pullback in confidence is becoming a real threat to consumer spending which, as is often repeated, accounts for two thirds of U.S. economic activity.”

Consumers are also now expecting elevated inflation to be a long-term issue, saying they expect prices will increase at an annual clip of 3.9% during the next five to 10 years, the biggest month-over-month jump since 1993, the survey found. That’s far higher than the Federal Reserve’s inflation goal of driving the annual rate down to 2%. 

  • Umair

    Muhammad Umair is a passionate content creator, web developer, and tech enthusiast. With years of experience in developing dynamic websites and curating engaging content, he specializes in delivering accurate, informative, and up-to-date articles across diverse topics. From gaming and technology to crypto and world news, Umair's expertise ensures a seamless blend of technical knowledge and captivating storytelling. When he's not writing or coding, he enjoys gaming and exploring the latest trends in the tech world.

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