Washington
Americans are not only increasingly fearful of higher inflation with President Donald Trump set to announce a sweeping spate of tariffs in just a few days but many more are now dreading rising unemployment.
Consumer sentiment tanked 12% this month, the University of Michigan said in its latest survey released Friday. That was a slightly steeper decline than the one reported in a preliminary reading earlier this month. Respondents blamed Trump’s erratic trade war for their jitters, the survey said.
“Consumers continue to worry about the potential for pain amid ongoing economic policy developments,” Joanne Hsu, the survey’s director, said in a release. “Notably, two-thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009.”
On Wednesday, Trump is set to announce duties that match the ones foreign countries impose on the United States, so-called reciprocal tariffs, which he has referred to as “the big one.” Trump this week already escalated his trade war by announcing 25% tariffs on all car imports, taking effect on April 3. So far, Trump has slapped tariffs on metals and doubled duties on China to 20%.
The Michigan survey’s “expectations” index, which captures respondents’ outlook for the economy, plummeted 18% “and has now lost more than 30% since November 2024,” according to a release. And this time, it wasn’t just Democrats and Independents feeling dour; Republicans also grew gloomier, “expressing worsening expectations since February for their personal finances, business conditions, unemployment, and inflation.”
Americans’ expectations for inflation in the year ahead climbed to 5% this month, up from 4.3% last month, reaching its highest level since November 2022. Meanwhile inflation expectations in the next 5 to 10 years also surged, rising to 4.1%, which was the highest level since February 1993, when it was also 4.1%.
This story is developing and will be updated.
