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2d ago

US Consumer Sentiment Hits Second-Lowest Level on Record as Tariff Concerns Persist

The University of Michigan's May index shows a 30% drop in sentiment since January, with inflation expectations reaching a 40-year high.

Shoppers consider big-screen televisions on display in a Costco store on April 1, 2025, in Thornton, Colorado.
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Overview

  • The University of Michigan's consumer sentiment index fell to 50.8 in May, marking its second-lowest reading ever, just above the record low of 50 in June 2022.
  • Consumer sentiment has declined for five consecutive months, driven largely by concerns over President Trump's tariff policies and their economic impact.
  • Three-quarters of survey respondents mentioned tariffs as a key concern, up from 60% in April, reflecting growing anxiety about trade policy instability.
  • Consumers now expect one-year inflation to rise to 7.3%, the highest level since 1981, further fueling economic uncertainty.
  • A temporary 90-day tariff truce between the US and China announced on May 12 has provided limited relief, with only minor improvements in sentiment recorded late in the survey period.