Americans have a really bad feeling about the economy thanks to President Donald Trump’s trade war against the rest of the world.
Consumer sentiment fell nearly 11% from March to April and 34% from this time last year, according to new data from University of Michigan’s authoritative survey, released Friday.
The drop continued a three-month trend brought about by Trump’s vow to impose tariffs on products imported to the U.S., a promise Trump fulfilled last week in what he called a “Liberation Day” ceremony at the White House.
“This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region, and political affiliation,” Joanne Hsu, director of the University of Michigan’s surveys of consumers, said in a press release.
It’s the worst consumer confidence reading since 2022, when inflation spiked under President Joe Biden, which was the worst reading since the Great Recession from 2007 to 2009.
Trump’s tariff announcement roiled stock markets and also rattled bond investors, causing prices to fall on U.S. debt, a development that prompted Trump to lower tariffs to 10% on all U.S. trading partners except China.
“The bond market is very tricky, I was watching it,” Trump said Wednesday in explaining his decision to partly undo the steeper tariffs. “The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.”
Normally, when stocks fall, bond prices rise as investors seek the relative safety of government debt. Falling bond prices potentially signaled a lack of confidence in Trump’s government.
The surveys underlying Michigan’s consumer confidence index for April, which will be updated later this month, were conducted before Trump pulled back some of the tariffs this week. Hsu said consumers have “growing worries about trade war developments that have oscillated over the course of the year.” An increasing share of survey respondents said they expect both higher unemployment and higher inflation in the coming months.
White House press secretary Karoline Leavitt said during a briefing Friday that “there’s a great optimism in this economy” ― or at least that there should be.
“Trust in President Trump. He knows what he’s doing. This is a proven economic formula,” Leavitt said.
(Economists have questioned the novel napkin-math formula the White House used to come up with the “reciprocal” tariffs that Trump lowered this week.)
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Consumer worries may be well-founded. Economists of all political stripes say tariffs burden consumers. Tariffs are excise taxes on imported goods, and the companies that have to pay the tax can recover all or some of the cost by raising prices. The Yale Budget Lab estimated the average household will be $4,700 poorer as a result of Trump’s tariff gamble, which he’s variously explained as a way to boost revenue for the government, to protect domestic manufacturing and to somehow stop other countries from ripping off Americans by selling us cheap goods.
Democratic leaders have condemned the tariffs and said Trump is walking the economy into a recession, a prospect economists have said is an actual possibility.
“Today’s terrible consumer confidence number is further evidence of the Trump Slump and anyone that believes the chaos and ensuing crisis of Trump’s tariff flip flop is behind us is sadly mistaken,” Senate Minority Leader Chuck Schumer (D-N.Y.) said Friday. “When Americans see the chaos caused by Donald Trump’s tax cut for ultra-wealthy and at least $4,700 a year in higher costs for every person, it’s no wonder consumer confidence is in the dumps.”
