U.S. Consumer Confidence Hits 13-Year Low as Inflation and Job Market Fears Intensify

The University of Michigan’s Consumer Sentiment Index dropped sharply in April, falling to 50.8 from 57.0 in March, marking its lowest level since June 2022.

This 11% monthly decline exceeded analysts’ expectations of a smaller drop to 54.0 and represents a 34.2% decrease compared to the same time last year.

The survey, conducted between March 25 and April 8, highlights widespread pessimism across all demographics, including age, income, education level, and political affiliation.

Consumers expressed growing fears about inflation and unemployment. One-year inflation expectations surged to 6.7%, the highest since November 1981, up from 5% in March. Long-term inflation expectations also rose to 4.4%, the highest since June 1991.

Meanwhile, the share of respondents anticipating higher unemployment reached its highest point since the Great Recession in 2009, marking the fifth consecutive monthly increase.

Trade tensions have played a significant role in this sentiment decline. President Donald Trump’s tariff policies have escalated into a full-blown trade war with China, with reciprocal tariffs reaching as high as 125%.

While Trump announced a temporary freeze on specific tariffs earlier this week, he maintained blanket duties on most imports, fueling fears of prolonged inflation and economic stagnation.

Economists warn that rising inflation expectations could lead to self-fulfilling behaviors, such as accelerated purchases or wage demands, further straining economic stability.

Despite official indicators showing low unemployment and moderate price increases so far, consumer sentiment suggests mounting recession risks and reduced spending power.

This sharp drop in confidence underscores the fragile state of the U.S. economy as consumers brace for potential financial strain amid ongoing trade conflicts and surging prices.