According to the University of Michigan, consumer attitudes towards the economy immersed during President Trump's first month in office. Monthly Consumer Survey Released on Friday.
Consumer sentiment fell nearly 10%, down from 71.7 in January to 64.7 in February. According to Monthly Research Director Joanne HSU, DIP appears to be heavily driven by consumer concerns that hiking tariffs could drive inflation.
Expectations for inflation next year jumped from 3.3% to 4.3%, while expectations for long-term inflation rose from 3.2% to 3.5%.
“What we're looking at is a very broad conclusion or opinion that inflation will be covered in the next five years, not just in the next five years,” says HSU. He told Yahoo Finance. “It was a pretty big monthly increase, both in the short and long term expectations.”
“While at this point it's not necessarily a cause of panic, these expectations clearly have concerns about policy and concerns that tariffs will lead to price increases,” she continued.
Trump has announced many new tariffs in recent weeks despite warnings from economists that raising import fees is likely to raise prices for Americans.
The president approved 25% tariffs in Mexico and Canada in early February. But they were ultimately delayed a month after the two countries announced procedures to halt drug flow at their respective borders.
Trump also collected 10% tariffs on Chinese imports and raised aluminum tariffs to 25%, but revived the “full power” of steel tariffs that he had increased during his first period.
He registered in the President's memorandum last week, proposing mutual tariffs consistent with those imposed by other countries on US products, but this week, in April, he added additional tariffs on automobiles, semiconductors and drugs. It signaled plans to announce.
Inflation also took place last month. The consumer price index rose 3% year-on-year in January, up from 2.9% in December. It has been marked for the fourth consecutive month that inflation has risen.
Another poll released by Gallup on Friday found that Americans still had confidence in the economy. A solid negative February.
After a slight clicking in the final months of 2024, American trust fell to negative 19 on Gallup's economic confidence index in January, remaining in February.
The biggest changes appear to occur between political parties as Democrats and Republicans essentially trade locations in their respective economic outlooks.
In October, Democrats placed a positive economic outlook score of 38, while Republicans had a negative 81 score. Currently, Democrats sit at Negative 87, while Republican counterparts sit at Positive 55.
The University of Michigan Consumer Survey also showed divisions along partisan boundaries. This has led to lower consumer sentiment for both Democrats and independents, not Republicans.
A similar division emerged in the hopes of inflation, rising for Democrats and independences, but slightly declined for Republicans.
