US Consumer Sentiment Sinks to Near Record Low

Consumer confidence in the United States has dropped sharply, again.

The University of Michigan’s preliminary April reading places the Index of Consumer Sentiment at 50.8, which is a reading not seen since the darkest months of the COVID-19 pandemic and the second-lowest point recorded since the index began in 1952.

There’s no mystery behind the mood. Concerns of rising inflation, spiking recession fears, and President Donald Trump’s latest moves on trade tariffs have combined to push public sentiment off a cliff. This marks the fourth consecutive monthly decline, and the scale of the fall is hard to ignore: consumer confidence has now sunk more than 30% since December.

Quick Note: Consumer sentiment reflects how people feel, not what they do. People can feel uncertain and still spend. But if that uncertainty sticks, spending usually falls next.

Across the Board

This isn’t a partisan blip or a reaction from one age group or income bracket. The downturn is unanimous. Age, income, education level, and political leanings didn’t matter. Everyone, it seems, is feeling the squeeze.

The deeper numbers provide an even bleaker picture.

Expectations for future economic conditions fell over 10% month-on-month, while views on current conditions slid by more than 11%. Perhaps most startling is the surge in inflation expectations: consumers now anticipate prices to rise 6.7% over the next year, which is the highest such reading since 1981.

Long-term inflation expectations aren’t far behind, ticking up to 4.4%, with independents reporting the largest jumps. Historically, independents have mirrored national sentiment more closely than either Democrats or Republicans. Their pessimism now suggests a broader national unease.

Trade War Takes Center Stage

The latest collapse in sentiment coincides with Trump’s aggressive tariff escalation. Just days before the survey wrapped, the president announced sweeping duties on dozens of countries. Although a partial 90-day pause (excluding China) was declared on April 9, the damage to public opinion had already been done.

The tariffs, described by some as the steepest hike in US history, have fueled concerns of rising prices and economic stagnation. They’re being compared, in their disruptive scale, to moments like the 2008 crash or the early days of the pandemic.

Some observers argue that consumers are reacting more to the idea of what might come rather than to any immediate financial hit. But perception often drives behavior. The worry is that these darker expectations may soon turn into reality, especially as households start tightening their budgets.

Politics in the Background

Interestingly, despite clear partisan swings in sentiment around presidential transitions, the current downturn cuts across party lines. Sentiment among both Democrats and Republicans has tanked. The gap between the two persists, but the direction is the same.

Researchers found that while Republicans often react more positively under Republican administrations and vice versa, independents remain a stabilizing barometer, and right now, they’re not feeling good either. That consistency lends more credibility to the national picture the sentiment data is painting.

Quick Note: While all groups are concerned, independents registered the sharpest increase in long-run inflation fears. Historically, this group tracks closest to national sentiment so their jump is worth watching.

People are nervous, and not without reason. Talk of recession is everywhere. And a trade war that won’t quit is now starting to feel like more than just political theater. It’s beginning to hit home.

If sentiment keeps crumbling, spending may follow. And if spending falls, the soft data becomes hard consequences.