The post-election surge in consumer confidence under President Donald Trump has quickly faded, with economic uncertainty taking center stage. Market volatility, tariff threats, and a flurry of executive order reversals are fueling concerns across party lines, pushing sentiment to its lowest point since mid-2024 – as reported by The Wall Street Journal.
According to preliminary data from the University of Michigan’s February survey, consumer sentiment declined by 5%, hitting its lowest level since July. Inflation expectations for the coming year jumped from 3.3% in January to 4.3%, marking the second consecutive month of steep increases and the highest reading since November 2023.
“It’s unusual to see such a sharp increase in inflation expectations,” said Joanne Hsu, the survey’s director. She noted that Republicans, who initially experienced a confidence boost after the election, are now expressing greater economic anxiety. Meanwhile, Democrats and Independents also believe financial conditions have worsened in recent weeks.
A separate consumer confidence index from Morning Consult also showed a drop between January 25 and February 3, largely driven by worries about the country’s economic future.
The initial spike in consumer confidence following Trump’s November victory was largely fueled by Republican optimism. However, concerns over tariffs and economic policy reversals have since taken hold. Trump, who campaigned on boosting economic growth and curbing inflation, has faced warnings from economists that his aggressive trade policies could have the opposite effect. The former president has defended tariffs, acknowledging short-term pain but arguing they would ultimately lead to job growth and a stronger economy.
Despite temporarily halting plans to impose tariffs on Canadian and Mexican imports, consumer anxieties remain high. Inflation expectations soared after Trump’s December 16 press conference, where he proposed a 10% tariff on Chinese imports and a 25% tariff on goods from Mexico and Canada. Another surge in concerns came on January 21, when he reaffirmed his commitment to implementing the tariffs by month’s end.
A recent academic survey found that Americans expect to bear nearly half the cost of a hypothetical 20% tariff. “The notion that ‘foreigners will pay for our tariffs’ doesn’t align with the data,” said University of Chicago economist Michael Weber, a co-organizer of the study. Republicans estimated consumers would shoulder 41% of the costs, while Democrats expected the figure to be closer to 68%.
Concerns about the stock market are also growing. The American Association of Individual Investors reported that 42.9% of respondents now expect stock prices to decline over the next six months—the highest percentage since November 2023 and well above historical averages.
