Hilary Kramer, manager of Greentech Research Investment Analyst and Portfolio, discusses how investors can navigate the market during the tariff turbulence to “make money.”
Consumer sentiment fell sharply in April as President Donald Trump expanded the trade war, as 12 months of inflation expectations surged to the highest level since 1981.
The University of Michigan Consumer Survey reported on Friday that the Consumer Sentiment Index fell to 50.8 this month from April 57. It marked a fourth monthly decline in consumer sentiment.
“This decline was unanimous and prevalent across age, income, education, geographical region and political affiliation,” said a survey by consumer Joan Huss.
“Sentiment has lost more than 30% since December 2024 amid growing concerns about the development of the trade war that has been oscillated throughout the year. Consumers have reported multiple warning signs that increase the risk of a recession. Business conditions, personal finances, income, inflation and labor market expectations all continue to deteriorate over the month,” HSU added.
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Consumers reported rising inflation expectations for the job market and declining reliability in the University of Michigan’s latest consumer confidence survey. (Allen J. Schaben / Los Angeles Times Getty Images / Getty Images)
For the fifth consecutive month, the report found an increase in the percentage of consumers who are hoping to face unemployment this year. That metric is now more than twice the survey’s November 2024 reading, at its highest level since 2009.
“This lack of trust in the labour market is in contrast to the past few years when robust spending was supported primarily by strong labour markets and revenues,” writes HSU.
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President Donald Trump’s tariffs are shaking financial markets and the broader economy. (Andrew Harnik / Getty Images / Getty Images)
Consumers’ annual inflation expectations rose from 5% last month to 6.7% this month. This is the best read since 1981, marking the fourth consecutive month of what the report said was “an extraordinarily large increase of over 0.5 percent points.” That increase was seen across all three political alliances.
Long-term inflation expectations rose from 4.1% in March to 4.4% in April, with the survey focusing on a particularly big jump among the independents surveyed.
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Duties are taxes on imports paid by importers, which usually pass higher costs to consumers at higher prices. (Getty Images/Sam Wolf via Getty Images/Bloomberg)
The University of Michigan survey was conducted between March 25th and April 8th.
That means Trump ended on April 9th before his announcement of a partial suspension at “mutual” tariffs. This was reduced to 10% for 90 days for most trading partners, increasing the increase in tariffs on Chinese goods to 145%. His tariffs on vehicles, auto parts, steel and aluminum remain in effect.
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These tariffs have contributed to several major economic forecasters hiking the possibility that the US economy could enter a recession this year.
Reuters contributed to this report.
