Consumer sentiment plunges amid trade war talk, stock market woes
The U.S. consumer has soured on the economy, and their outlook has taken a pessimistic turn.
HIGH POINT – The U.S. consumer has soured on the economy, and their outlook has taken a pessimistic turn.
That’s according to the University of Michigan’s latest consumer sentiment survey released today. The report signaled that consumer sentiment dove 11% this month to preliminary reading of 50.8, the second-lowest reading on record dating back to 1952.
The trade war, threatening increased inflation, has had an impact on consumer outlook. This report follows The Conference Board’s report last month indicated that the consumer expectations index had hit a 12-year low and consumer confidence had dropped more than seven points.
The university said consumer sentiment has now lost more than 30% since December amid “growing worries about the trade war developments that have oscillated over the course of the year,” said Joanne Hsu, survey of consumers director.
Hsu said consumers pointed to a number of warning signs that raise the risk of recession, including expectations for business conditions, personal finances, incomes, inflation and labor markets all continued to deteriorate this month.
“This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region and political affiliation,” she said.
The number of consumers expecting unemployment to climb this year increased for the fifth consecutive month and is now double the November reading and at its highest since 2009.
“This lack of labor market confidence lies in sharp contrast to the past several years, when robust spending was supported primarily by strong labor markets and incomes,” Hsu said.
The survey, which was fielded between March 25 and April 8, doesn’t take into account reaction to President Trump’s tariff delay.
Consumers expecting year-ahead inflation climbed from 5% last month to 6.7% this month, the highest reading since 1981. Hsu noted that the increase was seen across all three political affiliations.
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