Consumer sentiment collapse
American consumer sentiment plunged to its worst reading in half a century, and analysts singled out tariff uncertainty as a primary driver of the drop. The report says tariffs have injected fresh uncertainty into household budgets and corporate planning, shifting concern from markets to everyday economic decisions. (webanditnews.com)
U.S. consumer sentiment fell to 47.6 in early April, the lowest reading in the University of Michigan survey’s history. (reuters.com) The preliminary April reading, released April 10, dropped from 53.3 in March and missed economists’ 52.0 estimate. Consumers also lifted their one-year inflation expectation to 4.8% from 3.8% a month earlier. (reuters.com) Joanne Hsu, who directs the Michigan survey, said short-run economic expectations fell 14% in April and expected personal finances fell 10%. She said the declines hit every age group and political party, with larger drops among middle- and higher-income households with stock holdings. (umich.edu) The survey matters because it tracks whether households think they can keep spending, borrowing and making big purchases. In April 2025, the same survey showed expectations falling at the fastest three-month pace since the 1990 recession as trade-policy uncertainty spread into views on jobs, incomes and business conditions. (umich.edu) Tariffs have been showing up in consumer interviews for months. In January 2026, the Michigan survey said fewer than 40% of respondents spontaneously mentioned tariffs, down from 66% in May 2025, but the people who did mention them still reported higher inflation expectations than those who did not. (umich.edu) Federal Reserve researchers said on April 8 that tariffs imposed through November 2025 had raised core goods personal consumption expenditures prices by 3.1% through February 2026. They said those tariffs added 0.8% to core personal consumption expenditures prices overall and found evidence of near-complete pass-through into consumer prices. (federalreserve.gov) Not every confidence measure has moved the same way. The Conference Board said March consumer confidence edged up to 91.8 from 91.0 in February, even as its chief economist, Dana Peterson, said rising costs from tariff pass-through and higher oil prices were visible in inflation expectations. (conference-board.org) Federal Reserve officials have been describing the backdrop in similar terms. St. Louis Fed President Alberto Musalem said on April 1 that the outlook was “highly uncertain” and that risks now point both to weaker hiring and to inflation staying above target. (stlouisfed.org) The new Michigan reading turns that uncertainty into a household number: 47.6. It says worries once framed as market or trade-policy issues are now landing in family budgets and year-ahead price expectations. (reuters.com)
