According to a new report.
The consumer feeling index, a score based on a monthly survey questioning the Americans on their financial prospects, has dropped 32% since January – the highest decline since the 1990 recession, according to the Social Research Institute of the University of Michigan.
“The expectations have worsened for large expanses of the population through age, education income and political affiliation,” said Joanne Hsu, director of consumer surveys, in a statement. “Consumers have perceived the risks to several aspects of the economy, largely due to continuous uncertainty concerning commercial policy and the potential for the resurgence of inflation which is looming.”
In April, the consumer feeling index fell to 52.2, compared to 57 in March. The last time the index fell below 55 was in the summer of 2022, when inflation increased to 9%.
The expectations of inflation consumers also climbed from 5% in March to 6.5% in April, the highest it has been since 1981.
It is a sign that, despite its insistence that the prices “make a lot of money” and will not yet have increased prices, Trump has still not convinced many Americans that his prices will really work.
Trump’s trade policies have frightened investors, causing sales in the equity and bond markets. The president softened his tone earlier this week on his trade war with China after a few volatile weeks. The markets rallied after Trump said that his Chinese prices “will fall considerably”, although he also warned that “it will not be zero”.
But Wall Street tends to be more reactive than consumers, who have shown four consecutive months to decline feeling about the economy. Even after Trump interrupted the highest of his reciprocal prices, which increased the stock markets, the expectations of consumer inflation remained much higher compared to March.
Higher inflation expectations have also been twinned with consumers anticipating slower income growth for the coming year, which means that more of them will hesitate to pass in the coming months – which could ultimately mean a slowdown in the economy.
“Without a reliability, it is unlikely that expenses remain strong in the midst of the many warning signs collected by consumers,” said HSU.
