Consumer confidence declined in the first month of Trump, as the tariff threats pay fears of inflation

Consumers’ position towards the economy was issued during the first month of President Trump, according to the Michigan Monthly consumer surveying on Friday.

The consumer’s feeling decreased by approximately 10 percent, decreasing from 71.7 in January to 64.7 in February. DIP seems to be largely driven by consumer concerns that the high customs tariff may stimulate inflation, according to Hoan HSU, director of the monthly survey.

The inflation expectations next year jumped from 3.3 percent to 4.3 percent, while the long -term inflation forecast increased from 3.2 percent to 3.5 percent.

“What we see is a very large conclusion or opinion among consumers that inflation will pick up next year as well as the next five years,” HSU told Yahoo Finance. “It was a significant increase per month for both short and long expectations in the long run.”

“This is not necessarily a reason for panic at this moment, but it is clear that these expectations revolve around concerns about politics, and they are concerns that the definitions will lead to high prices,” she said.

Trump has announced a set of new customs tariffs in recent weeks despite warnings from economists that raising fees on imports is likely to lead to high prices of Americans.

The president signed a 25 percent tariff for Mexico and Canada in early February. However, they were eventually delayed one month after the two countries announced steps to stop the flow of medicines to the borders of each.

Trump also imposed a 10 percent tariff on Chinese imports and raised an aluminum tariff to 25 percent, with the “full force” of steel definitions that he increased during his first term.

It signed a presidential note last week proposing a mutual tariff to match those other countries imposed on American products, while indicating this week’s plans to announce an additional tariff for cars, semi -conductors and pharmaceutical preparations in April.

An inflation also put a mark last month. The consumer price index increased by 3 percent yearly in January, up from 2.9 percent in December. It was the fourth consecutive month in which inflation rose.

A separate survey issued by Gallup on Friday found that the confidence of the Americans in the economy remained strong in February.

After placing it a little in the last months of 2024, the confidence of the Americans fell to 19 negatives in the economic confidence index in Gallup in January, where it remained in February.

It seems that the biggest shift occurs between political parties, as Democrats and Republicans have mainly circulated places in their expectations for the economy.

In October, Democrats obtained a positive positive degree of positive, while Republicans have a negative degree 81. Now, Democrats sit in 87 negatives, while their Republican counterparts sit in 55 positively.

Michigan’s consumer survey also showed a division along the partisan lines, as consumer morale decreased for both Democrats and independents, but not Republicans.

A similar division appeared in inflation expectations, as it rose to Democrats and independents, but it decreases slightly for the Republicans.