American consumer sentiment has plummeted to one of its lowest levels since records began in 1952. According to the University of Michigan’s latest survey, sentiment fell by 11% this month, reaching a preliminary reading of 50.8. This marks the second-lowest level ever recorded, with April’s figure being even lower than during the Great Recession. The ongoing trade war initiated by former President Donald Trump, which has raised concerns about inflation, has significantly impacted consumer confidence over recent months. The survey indicates that sentiment worsened ahead of Trump’s announcement of broad tariffs. Joanne Hsu, director of the survey, noted that the decline was consistent across all demographics and political affiliations. Since December 2024, sentiment has dropped by over 30%, driven by uncertainties surrounding trade developments. The Federal Reserve and Wall Street are closely monitoring how this shift in sentiment affects consumer spending, which constitutes approximately 70% of the US economy. Although hard data, such as retail sales, remains relatively stable, there are signs of weakening. The relationship between sentiment and actual spending remains complex, with wealthier consumers continuing to spend despite market turbulence. However, prolonged uncertainty could threaten this trend. Additionally, inflation expectations have surged to their highest levels since 1981, raising concerns for the Fed about maintaining price stability.
— new from CNN
