Consumer sentiment has taken a hit despite President Donald Trump’s recent efforts to ease tariffs. The latest survey from the University of Michigan shows that consumer attitudes have soured for four consecutive months, with sentiment now hovering near its lowest level since 2021.
The decline in consumer sentiment can be attributed to inflation fears and recession warnings set off by Trump’s initial rollout of levies. However, a recent trade agreement between the US and China has reduced tit-for-tat tariffs and triggered a surge in the stock market. This development has led to a softening of forecasts for a recession.
Despite this, uncertainty remains over the economic outlook due to the ongoing presence of tariffs. The 30% tariff on China far exceeds the level before Trump took office, posing a risk of price increases for various products. Walmart executives have warned of potential tariff-driven price increases for perishable imports and toys.
The trend poses a risk for the wider economy, as consumer spending accounts for roughly two-thirds of economic activity. The US economy shrank at the outset of this year, but analysts caution that this figure may not accurately reflect economic weakness due to changes in import calculations.
The survey’s findings highlight the ongoing impact of tariff uncertainty on consumer sentiment. As the situation continues to evolve, it remains to be seen how consumers will react to any further changes in tariffs or trade policies.
Source: https://abcnews.go.com/Business/consumer-sentiment-worsens-despite-trumps-rollback-tariffs-survey/story?id=121869699