A new survey from the University of Michigan has found that consumer sentiment worsened in August, reversing a recent trend of improving attitudes among shoppers. The drop comes after President Donald Trump imposed sweeping new tariffs on nearly 70 countries.
The tariff increase, which affects nearly 70 countries, led to a rise in inflation expectations from 4.5% to 4.9% year-over-year, surpassing economists’ forecasts. This suggests that the economy may face higher-than-expected inflation pressures, potentially affecting consumer spending and economic growth.
Consumer sentiment had previously improved over two consecutive months before retreating due to Trump’s tariff policy. The measure has now fallen to its lowest point since a bout of inflation in 2020, with expectations still below pre-Triumph levels.
Despite the negative sentiment, some aspects of the economy remain resilient. Consumer spending remains strong, and corporate earnings continue to hold up. However, the Federal Reserve has expressed concerns about potential rekindling of inflation due to the tariffs.
The survey’s findings come as economists and policymakers await further updates on the impact of Trump’s tariff policy on the US economy.
Source: https://abcnews.go.com/Business/fresh-data-show-consumer-sentiment-amid-sweeping-new/story?id=124651915