US consumers’ feelings about the economy remain pessimistic after President Donald Trump’s tariffs, with a new report showing consumer sentiment at its lowest level in recent history. The University of Michigan’s consumer sentiment index fell 2.7% to 50.8 for May, surpassing the previous record low of 50 in June 2022.
The drop is part of a concerning trend, with consumer sentiment down nearly 30% since January and expectations of future inflation rising to 7.3%. The current economic conditions index also plummeted to 57.6, the lowest reading since December 2022.
Experts point to President Trump’s trade policies as a major contributor to the decline in consumer sentiment, with three-quarters of respondents mentioning tariffs in the survey. Consumers across both parties expect tariffs to be painful and costly, leading many to fear for labor market stability.
“The uncertainty and instability of tariff policy are causing consumers to brace,” said Joanne Hsu, director of the University of Michigan’s Surveys of Consumers. “We need communication about what these policies mean for consumers’ lives.”
Economists had expected a slight improvement in May, but the report shows that consumer sentiment remains low. Experts warn that the decline could be a sign of deeper economic concerns, particularly regarding labor market resilience.
As inflation rises and consumer incomes are hit by tariffs, many are worried about weakening labor markets. The latest reading highlights the need for policymakers to communicate their policies’ impact on consumers.
Source: https://edition.cnn.com/2025/05/16/economy/consumer-sentiment-may-preliminary