Apparently, people do understand that Trump is wrecking the economy. Even Republicans.
Consumer sentiment plunged 11% this month to a preliminary reading of 50.8, the University of Michigan said in its latest survey released Friday, the second-lowest reading on records going back to 1952. April’s reading was lower than anything seen during the Great Recession.
President Donald Trump’s volatile trade war, which threatens higher inflation, has significantly weighed on Americans’ moods these past few months. That malaise worsened leading up to Trump’s announcement last week of sweeping tariffs, according to the survey.
“This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region and political affiliation,” Joanne Hsu, the survey’s director, said in a release.
“Sentiment has now lost more than 30% since December 2024 amid growing worries about trade war developments that have oscillated over the course of the year,” she added.
This is particularly ominous and totally self-inflicted:
Expectations for inflation rates in the year ahead surged to 6.7% this month from 5% in March, the highest level since 1981, while expectations for the next five to 10 years climbed to 4.4% from 4.1%.
If people do lose faith that inflation will ever get back to normal in the coming years, that would make it extremely difficult for the Fed’s monetary policy to fight inflation.
“History teaches that when higher inflation expectations become entrenched, the road back to price stability is longer, the labor market is weaker and the economic scars are deeper,” Dallas Fed President Lorie Logan said Thursday at an event in Dallas.
Inflation expectations these days may be more susceptible than usual to becoming “un-anchored,” since consumers just experienced a period of high inflation, leaving many Americans particularly sensitive to elevated prices.
No kidding. The fact that he had a strong, growing economy and has purposefully thrown it over a cliff is the best evidence there is that there’s something very wrong with him this time. This is not the way he usually operates. He is the guy who takes credit for others successes and blames others for his failures. Something’s different and he’s even more reckless and rash. His faith in his own instincts is completely dominant now and that’s terrifying.
People can see this and it’s translating into pessimism about the economy. And that could end up being a self-fulfilling prophecy as we watch him decompensating before our eyes.