Today’s University of Michigan Consumer Sentiment shows consumer perceptions about the economy remain historically low. The consumer sentiment reading was 57.3 in February, signaling a depressed view of the economy even after a small uptick from January. This reading is 11.4% lower than it was a year ago. Households continue to express concern about high prices and a weakening labor market. Consumers with large stock portfolios drove the improvement in sentiment, while confidence among those without stock holdings remained low, providing further evidence of the growing gap between the wealthy and the working class in Trump’s economy.
Groundwork Collaborative’s Chief of Policy and Advocacy Alex Jacquez released the following statement:
“Americans already know what today’s data confirms: prices are far too high and the economy is sputtering. Trump promised relief, but his chaotic tariffs are squeezing working families while businesses pull back investment and slow their hiring. Unless this president reverses his failed policies and actually delivers the relief he keeps promising, consumers will continue to expect the worst.”
Consumers don’t see relief from inflation on the horizon. Inflation expectations are still above the Fed’s 2% target. Consumers now expect prices to rise 3.5% over the next year. The long-run inflation expectation rose to 3.4% from 3.3% last month, signaling growing doubt among consumers that prices will meaningfully decline under Trump’s economic agenda.
Consumer confidence declined sharply. The Conference Board’s Consumer Confidence Index fell sharply in January to its lowest level since May 2014. Expectations deteriorated across income groups and political affiliations, signaling broad unease about the direction of the economy. The share of consumers saying jobs are currently hard to get rose to its highest level since February 2021.
Price pressures rose for US businesses. Recent producer price data show companies are facing rising input costs, especially among goods tied to inflation. There’s growing evidence that businesses are passing those higher costs on to consumers.
The labor market continues to show signs of strain. The latest JOLTS report shows job openings fell to their lowest level since 2020, dropping to 6.5 million in December. For the second straight month, there were more unemployed workers than available jobs. Challenger, Gray & Christmas reported that announced layoffs in January more than doubled from a year earlier, marking the highest January total since 2009. Recent high-profile layoffs from companies like Amazon and UPS are just the latest examples of employers pulling back.