US consumer sentiment has fallen sharply, with a 8% decline in April from the previous month, according to the University of Michigan survey. This marks the fourth-lowest level on record since 1952. The decline is largely attributed to concerns over trade policy and inflation.
President Donald Trump’s tariff delay may have temporarily alleviated some of these concerns, but economists warn that this could be a short-term effect. With consumer spending accounting for the majority of the US economy, any slowdown could lead to weaker economic growth or even a recession.
While previous surveys have shown consumers continuing to spend despite negative economic sentiment, experts say it’s uncertain how this will play out in practice. The job market isn’t as strong as it was last year, and consumers have already exhausted their pandemic-era savings.
Federal Reserve Chair Jerome Powell has noted that sometimes surveys are very negative but people still spend. However, with the Federal Department of Education resuming federal student loan collections and evidence of increased financial strain among consumers, economists say it’s essential to assess the underlying health of consumer spending carefully.
The Fed is closely monitoring economic data for signs of damage from Trump’s policies, including tariffs and mass deportations. With inflation expectations at a 40-year high, policymakers are uncertain about the extent and duration of these effects. A wait-and-see approach is being adopted, with officials keeping a close eye on any potential economic fallout.
For now, consumer spending remains a critical factor in the US economy, and its impact will be closely watched by policymakers and economists alike.
Source: https://edition.cnn.com/2025/04/25/economy/us-consumer-sentiment-april-final/index.html