Washington (AP) – The US consumer mood fell in April, the fourth month in a row, in an apparently pointed reproduction of the trade wars of President Donald Trump, the fear of possible job loss and increasing inflation.
The preliminary reading of the closely observed consumer tune index of the University of Michigan fell to 50.8 per month, the lowest since the depths of the Covid 19 pandemic. Last year the feeling fell by 34%.
The decline was unanimously and unanimously and unanimously, “said Joanne Hsu, director of the survey.
The proportion of respondents who expects unemployment to enhance in the fifth month in a row in the coming months and has now been the highest since 2009 during the great recession.
While the consumer mood is not always a reliable indicator of the overall economy, it temporarily reflected on the displacement of the vibes about how the public feels about the president of the president. The mood of the Republicans dropped 6% last month when Trump teased, and then released a number of aggressive tariffs to introduce a 90-day break of some import taxes on Wednesday.
“Interestingly, President Trump seems to have a large part of the fault for a large part of the worsening of the mood, with 67% of the respondents say that the government does a” bad job “to combat inflation and unemployment,” said James Knightley, chief -International economist at Ing. “Only 18% say that it does a good job.”
The result of the previous trade war drama is a basic tariff in most countries of 10%, whereby imports from China are taxed to 145%. Goods from Canada and Mexico are exposed to up to 25%tariffs, while imported cars, steel and aluminum are taxed with the same sentence. China returned to US goods on Wednesday with a tariff of 125%.
The Trump administration has proposed that it has reduced modern trade agreements with more than 75 nations over a period of 90 days.
“We are doing very well in our tariff policy,” said Trump on Friday on his social media website Truth Social. “Very exciting for America and the world !!! It moves quickly.”
The eroding American trust has also appeared on the financial markets. Investors sell US debts. The interest rate for the 10-year-old US Ministry of Finance reached 4.53% on Friday, compared to around 4% at the beginning of the week. This indicates more economic instability.
On Friday, the dollar sagged to a three-year low compared to the euro.
Larry Fink, CEO of the investment company Blackrock, told CNBC that the US economy is about to downhale, if not there.
“I think we are now very close if not in a recession,” said Fink.
The Michigan Sentiment survey showed that people now expect long-term inflation to reach 4.4%, compared to 4.1% in the last month, a step that can be of particular importance for the US Federal Reserve. The Fed pays attention to the expectations of inflation because they can fulfill themselves. If people expect prices to rise, they often take steps that can enhance prices, e.g. B. the acceleration of purchases or the search for higher wages.
This is a sign that most public views this week as Blip data show that the inflation of consumers in March decreased to an annual rate of 2.4%. Most economists believe that inflation is likely to be inflamed again in view of the intensive trade wars.
According to the Capital Economics, a forecast company, the Americans’ inflation expectations in the next five years have been highest since 1991.
“Households seem to have come to the same conclusion as the markets: the tariffs will cause permanent damage to the US economy,” said Harry Chambers, deputy economist at Capital Economics.
Consumer mood remains well shared by the party, with the index for Democrats at 34.1 and the Republicans at 81.9. But both recorded steep drops in April.
The mood among the independent fell from 55.7 to 46.8 and is strongly below the peak after the election of 70.2. The reading in April among the independent is now lower than in every point during Joe Biden’s presidency.
These inflation expectations have increased for several months. At a press conference last month, Fed said chairman Jerome Powell that the inflation expectation measure of the University of Michigan was a “outlier”. Market -based measures of the inflation expectations based on inflation -adjusted finance have remained low near the 2% goal of the Fed.
As a rule, there is a falling feeling that the Americans will reduce expenses, although consumers have sometimes spent again and again in recent years despite the darkness. However, the fact that employment employees increases through employment could lead to more caution from consumers.
“This lack of labor market trust has been in a sharp contrast to the past few years, when robust expenses have been mainly supported by strong labor markets and income,” said HSU.
What makes this special moment unique is that the back and forth over tariffs have created a certain degree of paralysis by setting freezing and uncertainties.
“For everyone who unfolds this process, he is very afraid because they do not know how to make the right decisions when things change every hour,” said David French, Senior Vice President for government relationships at the National Retail Federation.
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AP reporter Paul Wiseman contributed to this report.
