Trump’s tariffs have triggered market turmoil and a trade war with China.
Consumer attitudes worsened in April as President Donald Trump’s new tariffs triggered market upheaval and warnings of a possible recession, University of Michigan survey data on Friday showed. Sentiment soured more than economists expected.
The survey marked the fourth consecutive month of dampening consumer attitudes, data showed.
Consumers expect inflation to worsen, the survey said. Year-ahead inflation expectations surged from 5% last month to 6.7% this month, the highest reading since 1981.
Sentiment worsened among consumers across all demographics of age, income, education, geographic region, and political affiliation, data showed.
Trump on Wednesday paused so-called “reciprocal tariffs” on most U.S. trade partners, but the White House also raised its cumulative tariffs on Chinese goods to 145%. Officials also left in place across-the-board 10% tariffs on most imported goods.
On Friday morning, China retaliated with 125% tariffs on U.S. goods, escalating a trade war between the world’s two largest economies.
Even after Trump paused some tariffs, U.S. consumers face an average effective tariff rate of 25.2%, the highest since 1909, the Yale Budget Lab found in report on Thursday.
Current tariffs are expected to cost on average an additional $4,400 per household this year, the Yale Budget Lab said.
Experts previously told ABC News they anticipate such price hikes will coincide with an elevated risk of a recession.
They pointed to the possibility of a slowdown for businesses mired in higher tax costs, as well as a shopping slump as consumers curtail spending to weather price increases and a possible economic downturn.
For now, the economy remains in solid shape by several key measures.
The unemployment rate stands at a historically low level, and hiring exceeded expectations last month.
Meanwhile, inflation cooled in March, putting price increases well below a peak attained in 2022, fresh data on Thursday showed.
Still, Trump’s tariffs have fueled concerns about an uptick of inflation over the coming months.
“That was nice, but don’t get used to it,” Greg McBride, chief financial analyst at Bankrate, told ABC News in a statement after the favorable inflation report on Thursday.
