American consumers are growing increasingly worried about their financial futures, with growing concerns about a weakening economy and rising inflation driven by President Donald Trump’s tariff war.
The consumer sentiment survey from the University of Michigan reported Friday that its overall index dropped 11% over the past month, to a preliminary reading of 50.8, marking the fourth straight month of decline.
“Sentiment has now lost more than 30% since December 2024 amid growing worries about trade war developments that have oscillated over the course of the year,” University of Michigan Survey of Consumers director Joanne Hsu said.
Hsu added that the across-the-board decline in sentiment is itself a signal that a recession may be on the horizon. “Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate this month,” she said.
The percentage of respondents saying they expect unemployment to rise increased for the fifth straight month and is now twice its level in November 2024. According to CNN, the April reading is the second lowest going back to 1952, and worse than any result during the Great Recession.
In a note to clients Friday, Capital Economics economist Harry Chambers said that consumers are in sync with Wall Street. “Households appear to have come to the same conclusion as markets: the tariffs will do lasting damage to the US economy,” he wrote, per Yahoo Finance.