WASHINGTON (AP) – U.S. consumer sentiment plummeted in April in a fourth straight month of decline. Trade wars It has fueled fears about possible unemployment and rising inflation.
Preliminary reading of the University of Michigan’s closely monitored consumer sentiment index; Released on Fridayfell 11% each month to 50.8. This is the lowest due to the depth of the Covid-19 pandemic. Over the past year, sentiment has fallen 34%.
The decline was “unanimous and unanimous,” said Joan Huss, director of the survey.
The share of respondents who expect unemployment rates to rise in the coming months has increased for five months, and is now the highest in the Great Recession since 2009.
Consumer sentiment is not always a reliable indicator of the economy as a whole, but it can change the mood around how the public feels about presidential leadership. Feelings among Republicans have fallen by 6% over the past month as Trump was teased, and have since rolled out a series of aggressive tariffs. An 90-day suspension is established Wednesday’s import tax.
“Interestingly, it appears that President Trump blames much of the emotional degradation of 67% of respondents who say the government is doing ‘poor work’ in the fight against inflation and unemployment.” “Only 18% say they’re doing ‘good work’. ”
Asked at a news briefing on Friday about consumer sentiment, White House spokesman Caroline Leavitt said the public should trust Trump when implementing his tariff plans.
“Like he said, this will be a transition period,” she said. “He wants consumers to trust him, and they should trust him.”
The outcome of previous trade war dramas is baseline tariffs for most countries of 10%, and imports from China are taxed at a total of 145%. Canadian and Mexican goods face tariffs of up to 25%, while imported cars, steel and aluminum are taxed at the same rate. China retaliated on Wednesday There is a 125% tariff on US products.
The Trump administration has suggested it will cut new trade agreements with more than 75 countries over 90 days.
“We’re doing really well with tariff policy,” Trump said Friday on his social media site Truth Social. “It’s so exciting for America and the world!!! It’s moving forward very quickly.”
The erosion of America’s confidence is also emerging in financial markets. Investors are selling US debt. The U.S. Treasury 10-year interest rate was 4.48% on Friday afternoon, up from about 4% at the beginning of the week. This suggests economic instability in the future.
On Friday, the dollar fell to its three-year low against the euro.
Larry Fink, CEO of investment firm BlackRock, told CNBC that the US economy is still at the pinnacle of a recession.
“We think we’re very close, if not in a recession right now,” Fink said.
A Michigan Sentiment survey found that people expect long-term inflation to reach 4.4%. Special concerns about the US Federal Reserve. The Fed is paying close attention to inflation expectations as it could potentially self-realize. If people expect prices to rise, they often take steps that can boost prices, such as accelerated purchases or seeking higher wages.
This is a sign that most of this week is considered blip data, indicating that consumer inflation fell to 2.4% per year in March. Most economists believe that inflation is likely to rekindle given the fierce trade war.
Americans’ inflation expectations for the next five years are at their highest since 1991, according to forecasting company Capital Economics.
“It appears that households have reached the same conclusion as the market. Tariffs will last a lifetime of damage to the US economy,” said Harry Chambers, assistant economist at Capital Economics, in an email.
Consumer sentiment remains sharply divided by the parties, with a Democrat index of 34.1 and a Republican index of 81.9. However, both recorded sudden drops in April.
Feelings among independents plummeted from 55.7 to 46.8, falling sharply below post-election peak of 70.2. April reading among independents is lower than at any point in Joe Biden’s presidency.
These inflation expectations have been jumping on for several months. At a press conference last month, Fed Chairman Jerome Powell said he was a university at the University of Michigan. The measure of inflation expectations was “outliers.” Market-based measures of inflation expectations based on inflation-adjusted Treasury securities remained low near the Fed’s 2% target.
Lower emotions usually suggest that Americans cut their spending, but in recent years consumers have continued to spend despite the darkness. However, the fact that employment concerns are rising can lead to more attention from consumers.
“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,” HSU said.
What makes this particular moment unique is the creation of some degree of paralysis with round-trip and uncertainty over tariffs.
“For everyone who watches this process unfold, it’s causing a lot of anxiety because they don’t know how to make the right decision when things change hourly wages,” said David French, senior vice president of government relations at the National Retail Federation.
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AP reporter Paul Wiseman contributed to this report.
