Consumer sentiment fell nearly 10 percent, dropping from 71.7 in January to 64.7 in February in the University of Michigan’s monthly consumer survey.
At the same time, expectations for inflation in the next year have jumped from 3.3 percent to 4.3 percent, while long-run inflation expectations rose from 3.2 percent to 3.5 percent.
“What we’re seeing is a very broad-based conclusion or opinion among consumers that inflation is going to pick up in the year ahead as well as the next five years,” Joanne Hsu, director of the monthly survey, told Yahoo Finance. “It was a pretty large month-over-month increase for both short and long run expectations.”
“It’s not necessarily cause for panic at this moment, but these expectations are clearly being driven over concerns over policy, concerns that tariffs are going to lead to price hikes,” she continued.
Trump has announced a bevy of new tariffs in recent weeks despite warnings from economists that raising fees on imports will likely lead to higher prices for Americans.
The president signed off on 25 percent tariffs on Mexico and Canada in early February. However, they were ultimately delayed one month after both countries announced steps to stem the flow of drugs at their respective borders.
The Hill’s Julia Shapero digs deeper here.
