Mon May 19 08:20:00 UTC 2025: ## Consumer Sentiment Plummets Amid Trade War Fears, Near Record Low

**Washington, D.C.** – American consumer sentiment has plunged to near-record lows in May, fueled by concerns over President Trump’s tariff policies and their potential impact on the economy, according to the University of Michigan’s latest consumer sentiment index. The preliminary reading for May fell to 50.8, a 2.7% drop from April and just shy of the all-time low of 50 recorded in June 2022.

The index, which has been tracking consumer sentiment since 1952, has weathered numerous economic storms, including recessions, oil shocks, and even a global pandemic. However, the current downturn appears largely driven by anxiety surrounding the ongoing trade war.

“It’s very clear that consumers are bracing for the uncertainty and instability of tariff policy,” said Joanne Hsu, director of the University of Michigan’s Surveys of Consumers. A staggering 75% of survey respondents spontaneously mentioned tariffs, up from 60% in April, indicating widespread awareness and apprehension.

Consumers across the political spectrum anticipate that the tariffs will lead to increased prices. Year-ahead inflation expectations jumped to 7.3% from 6.5%, reflecting fears of a significant rise in the cost of goods and services.

The index of current economic conditions also took a hit, falling to 57.6, the lowest level since December 2022. Furthermore, consumer expectations for the future are bleak, with the index of consumer expectations dropping for the fifth consecutive month to 47.3, the lowest since July 2022.

“Consumers are understandably feeling a bit worse about where the economy is headed,” commented Elizabeth Renter, senior economist at NerdWallet.

Despite a recent de-escalation in tariffs between the US and China, the initial impact on consumer sentiment appears minimal. While some survey measures showed signs of improvement following the tariff reduction, Hsu noted that the upticks were “too small to alter the overall picture.”

The weakening consumer sentiment raises concerns about the overall health of the economy. “Consumers are really worried that labor markets are going to weaken,” said Hsu, adding that a growing number of respondents reported their incomes have already been negatively impacted. “This is definitely a concerning crack in the resilience of consumers.”

Economists are now closely monitoring consumer spending, a crucial driver of economic growth, to assess the potential impact of the deteriorating sentiment.

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