Consumer Confidence Falls as Trump Policies Drive Up Costs

Consumer Confidence Falls as Trump Policies Drive Up Costs

This week, consumer attitudes grew increasingly dour amid worries about the policies put forward by President Trump and Congressional Republicans. Consumer confidence dropped by more than 5 points over the past month, and consumer sentiment is still 18% below December while inflation expectations are on the rise. It’s clear that Americans are pulling back as prices rise due to Trump’s tariffs policy and Republicans advance a tax plan that will drive up the cost of health care, groceries, utilities, education, and more.

Groundwork Collaborative’s Chief of Policy & Advocacy Alex Jacquez released the following statement:

“While the economy shows signs of weakness and consumers pull back on spending, Trump and Congressional Republicans continue to shamelessly pursue another massive tax giveaway for wealthy donors by taking money from working families. In poll after poll, Americans are making their priorities clear: they want Trump to focus on lowering costs. Not only is President Trump failing to deliver, his trade and tax policies are set to inflict even greater financial pain.”

This week in the Trump Slump, new polling and economic indicators continue to show that President Trump’s actions are deeply unpopular and hurting the economy.

Polling: 

• A polling round-up from NBC News found support for the GOP budget bill was underwater in every survey included.
  • Fox News: 59% of registered voters oppose the bill.
  • Quinnipiac University: 53% of registered voters oppose the bill.
  • KFF: 64% of adults have an unfavorable view of the bill.
  • Pew Research Center: 49% of adults oppose it. (Another 21% said they weren’t sure.)
• A new poll from Strength in Numbers showed that 53.9% of adults disapprove of Donald Trump’s job as president, with his net approval rating on the economy at -17 and inflation at -20.
• Navigator Research recently conducted focus groups and found that many Americans—including Trump supporters—are worried about the economy. One Republican participant said, “Everything is more expensive, and it will get more expensive,” and another Republican shared, “If you look at the economy right now, it has not gotten better, it’s gotten worse.”

Economic Indicators: 

• The Conference Board reported that consumer confidence deteriorated by 5.4 points over the past month, despite consensus expectations of a 1.1 point increase. The largest decline in confidence was among Republicans. The Board reported that tariffs, inflation, and high prices were top concerns cited by consumers in June.
• Consumer sentiment increased slightly from May. Despite June’s gains, sentiment remains about 18% below December 2024—right after the election—showing consumer views are still broadly consistent with an economic slowdown and an increase in inflation to come.
• The PCE price index for May increased 0.1 percent, rising for the first time since February. Excluding food and energy, the PCE price index increased 0.2 percent. Personal income decreased by 0.4 percent in May, the weakest since September 2021. Personal consumption expenditures (PCE) decreased $29.3 billion (0.1 percent), down from April’s 0.2% increase.
• According to new U.S. Census data, sales of new single-family homes dropped 13.7% in May.
• Real gross domestic product (GDP) decreased at an annual rate of 0.5 percent in the first quarter of 2025 (January, February, and March), according to the third estimate released by the U.S. Bureau of Economic Analysis. This downward revision reflects weaker consumer spending, with personal consumption revised down by more than half, from 1.2% to 0.5%.
• The Department of Labor released the advance number for seasonally adjusted insured unemployment during the week of June 9th, with an increase of 37,000 from the previous week’s revised level. This is the highest level for insured unemployment since November 6, 2021.

Expert Commentary: 

• Michael Gapen, U.S. Chief Economist at Morgan Stanley, warned Trump’s trade policies will drive prices up even further: “The recent tariff announcement boosts the risk of rising inflation, particularly over the next three to six months… Tariff-induced inflation will keep the Fed on the sidelines.”
• Senior Economist at the Upjohn Institute Brad Hersbein spoke on job prospects for college graduates after new data showed unemployment rates for graduates ages 22-27 are at the highest levels in a dozen years: “Young people are bearing the brunt of a lot of economic uncertainty. The people that you often are most hesitant in hiring when economic conditions are uncertain are entry-level positions.”
• Groundwork Collaborative Executive Director Lindsay Owens joined Spectrum New York 1 to discuss New York State’s new dynamic pricing disclosure law and call on more states to ban personalized or surveillance pricing to protect consumers: “If lawmakers don’t get their act together and really think about regulating this space, we could be facing a world in which there is no standardized pricing. You have no idea what anything costs, there’s no predictability, and all prices are set according to your desperation and your individual ability to pay… I think we’re really moving into a dark place that lacks predictability and transparency if left unchecked.
• Groundwork Collaborative Chief of Policy and Advocacy Alex Jacquez reacted to  consumer confidence deteriorating by 5.4 points over the past month, despite consensus expectations of a 1.1 point increase: “The uncertainty caused by President Trump’s economic policies is wreaking havoc on our economy, on American businesses, and on household budgets. With no idea what costs are going to be in the next week, month, or year, it’s impossible for businesses to plan. It’s also hard for consumers to make big ticket purchases like cars or homes. Consumers of all political stripes are feeling the pain of Trump’s chaotic economy. Unfortunately, there’s no relief in sight for consumers, and Republicans in Congress are only set to make life more expensive for working families with their budget bill.”
• Groundwork Collaborative Managing Director of Policy and Advocacy Liz Pancotti discussed GDP revisions: “It’s clear consumers are pulling back… We saw consumer confidence deteriorate by 5.4 points over the past month – with the largest decline in confidence among Republicans. Retail sales were down 0.9% in May. New home sales have fallen by nearly 14% and car sales have fallen by more than 9% over the past month as families struggle to commit to big purchases.”
• Groundwork Collaborative Senior Advisor for Economic Policy Emily DiVito testified before the DOGE Subcommittee of the House Committee on Oversight and Government Reform on the devastating impact of DOGE cuts: “Americans deserve a government that works for them – a government that makes their lives easier and more secure. By that standard, DOGE has failed. DOGE directed widespread cuts to the federal agencies that administer vital basic needs programs for families and oversaw mass firings of government employees. Far from making government more efficient, DOGE has led to increased costs and administrative burdens and weakened consumer protections for American families.”