Sentiment among US consumers has plummeted. A new survey from the University of Michigan found that it’s hit its second-lowest point since 1952. The survey was open from March 25 to April 8. It indicated a surprising preliminary contractionary number of 50.8, an 11% month-on-month decrease. The confidence is eroding in one of the most economically uncertain times of recent history. A big part of this uncertainty is President Donald Trump’s never-ending trade war.
Those results — the monthly consumer survey, published Friday — are just the latest to paint a picture of a terrible mood hanging over Americans’ economic outlook. The equivalent sentiment reading of 50.8 is even lower than any monthly figure during the Great Recession. This decrease really brings into focus the degree to which trade tensions are weighing on consumer sentiment. Importantly, the survey was not able to record respondents’ responses to a then-recent tariff delay announced by the Trump administration.
Joanne Hsu, director of the survey, emphasized how pervasive this drop has been. She said, “This decline was universal and nonpartisan. It left no cohort untouched—including by age, income, education level, area of the country, or party ID—similar to last month. These results indicate that worries about higher tariffs and greater inflation have reached deep into every demographic.
The trade war has already had a significant impact on American consumers, with worries about inflation being one of the most prevalent fears. “History teaches that when higher inflation expectations become entrenched, the road back to price stability is longer, the labor market is weaker and the economic scars are deeper,” warned Dallas Fed President Lorie Logan. Recent turbulence on Wall Street, driven by the uncertainty associated with tariffs, adds another layer of doubt to the future of consumer spending.
With these difficulties, spending on the part of wealthier Americans has been a key pillar in continuing this economic expansion. Bill Adams, chief economist at Comerica Bank, noted that “wealthy consumers’ stock market gains kept the economy growing in 2024 despite high prices.” He warned that ongoing trade tensions might dampen their confidence to shop.
Our most recent survey reflected those same worries, including a dramatic uptick in fears about growing unemployment, with predictions more than doubling since November 2024. The percent of consumers expecting to be laid off has just hit its highest point since 2009. Against this backdrop of economic anxiety, Americans are less optimistic right now than they’ve ever been.
As the trade war continues to escalate, it poses a risk not just to consumer sentiment but to economic stability at large. The mutually applied reciprocal tariffs are the largest increase of U.S. duties in 200 years. In the meantime, China still gets exempted from all relief on these tariffs. After the most recent heart-stopping tariff hikes, U.S. tariffs on Chinese imports have jumped from 84% to 125%, adding all cost the fears are real.