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U.S. Consumer Sentiment Hits Near Record Low as Inflation Expectations Surge

The University of Michigan reports a sharp decline in consumer confidence to 50.8 in April, with inflation expectations reaching 6.7%, the highest since 1981, driven by trade war policies.

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A customer shops at a Walmart store in San Leandro, California. The preliminary University of Michigan April consumer sentiment index reading of 50.8 is the second-lowest on the university’s tracking, going back to 1952. (Getty Images/Justin Sullivan)
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Overview

  • The University of Michigan's Consumer Sentiment Index fell to 50.8 in April 2025, marking the fourth consecutive monthly decline and nearing record lows.
  • Year-ahead inflation expectations surged to 6.7%, the highest level since 1981, reflecting widespread consumer concern over rising prices.
  • President Trump's escalating trade war and tariff policies, including a 145% tariff on Chinese goods, are cited as key drivers of economic uncertainty and declining confidence.
  • The decline in sentiment is uniform across all demographics, with fears of unemployment and personal financial instability growing significantly.
  • Economists warn that surging inflation expectations and eroding consumer confidence could complicate Federal Reserve policy and increase the risk of a recession.