U.S. consumer sentiment jumped for the first time in months
Panic over tariffs has calmed somewhat as the feared effects haven't taken hold — yet
Photo: Bloomberg (Getty)
Consumer sentiment is improving for the first time in six months.
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The University of Michigan’s Survey of Consumers says buyers are feeling somewhat better about the U.S. economy — in the short term, at least. “Consumers still perceive wide-ranging downside risks to the economy,” it reads.
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Consumer sentiment in May rose 16% from April’s numbers, although it remains 20% below December 2024, in what was a post-election bump before Donald Trump took office.
In the six months yet, as Trump declared a trade war, consumers were feeling much more hesitant amidst all the uncertainty. “Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed,” reads the report. “These trends were unanimous across the distributions of age, income, wealth, political party, and geographic region.”
The Survey of Consumers is a national poll conducted for the last 79 years, focusing on three areas: consumers’ own financial situation, and their short-term and long-term views on the economy’s overall prospects.
A June 9 report from Chief Executive revealed that consumer demand is the same or higher than last year, which in turn supports a report from the Conference Board at the end of May. The Chief Executive report rates CEOs’ confidence in the U.S. economy on a scale of 1 to 10: last month it nudged up from 5.0 to 5.3. Rodon Group CEO Michael Araten thinks “business conditions are likely to improve as trade war calms down and interest rates are reduced.” Federal Reserve Chair Jerome Powell has held interest rates steady, to the public chagrin of Trump.
Trump declared April 2 to be “Liberation Day” with a series of tariffs on every U.S. trading partner. One week later, he backed down, enacting a 90-day pause and claiming that his team could negotiate 90 trade deals in the next 90 days. They only have one: with the U.K. A “framework” with China was announced on June 12, but details are scarce. The 90-day pause ends on July 1.
Tariffs have yet to fully impact American consumers. That will start to change soon, particularly on home appliances starting June 23.