Fri Apr 11 14:00:00 UTC 2025: ## Consumer Confidence Plummets to Near Historic Low Amidst Trade War Fears

**Ann Arbor, MI** – Consumer sentiment in the United States has plummeted to a near-historic low, according to the University of Michigan’s latest survey, fueling concerns about the potential impact on the economy. The preliminary index reading for April fell 11% to 50.8, the second-lowest level since 1952 and lower than readings during the Great Recession.

The sharp decline, described as “pervasive and unanimous” across all demographics by survey director Joanne Hsu, is largely attributed to President Trump’s trade policies. The escalating trade war, particularly the recent, albeit temporarily paused, tariff hikes, has significantly dampened consumer optimism. The survey, conducted between March 25th and April 8th, predates the announcement of a 90-day pause on the tariff increases, but already reflected widespread anxiety.

While “hard data,” such as employment figures and retail sales, still shows a relatively healthy economy, the deterioration in “soft data” like consumer sentiment is alarming. The survey revealed that the percentage of consumers expecting unemployment to rise has more than doubled since November 2024 and is at its highest point since 2009.

The Federal Reserve and Wall Street are closely monitoring the situation, particularly the impact on consumer spending, which accounts for 70% of the US economy. Concerns are rising that even the continued spending by wealthier Americans, a key driver of recent economic growth, may be undermined by ongoing market volatility.

Further exacerbating the situation is a surge in inflation expectations. Consumers now expect inflation to reach 6.7% in the coming year, the highest level since 1981, and 4.4% over the next five to ten years. This rise in inflation expectations could create a self-fulfilling prophecy, impacting spending patterns and making the Federal Reserve’s efforts to curb inflation significantly more challenging. Economists warn that entrenched high inflation expectations could lead to prolonged economic instability. While the 90-day tariff pause offers a temporary reprieve, the underlying concerns remain, leaving the future outlook uncertain.

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