On February 3, 2025, people buy in New York City in a whole foods store.
Michael M. Santiago | Getty pictures
Consumers were dramatically more concerned about the short-term inflation when President Donald Trump pushed aggressive tariffs against large US trading partners, as a precise survey on Friday showed.
The University of Michigan's consumer survey in February showed that the respondents expect the inflation rate in one year of 4.3%, one percentage point of 1 percent compared to January and the highest level since November 2023.
Although Trump had postponed the tariffs against Canada and Mexico, the impending threat caused by consumers trembled the mood. China has raised retaliation tariffs after Trump's move. The survey window ran from January 21, the day after taking office from Trump to February 3.
“Many consumers seem to be concerned that a high inflation will return next year,” said Joanne Hsu, director of the survey. “This is only the fifth time in 14 years that in the expectations of inflation in inflation we have recorded such a large climber (one percentage point or more) to an increasing increase in 1 and more.”
Long -term expectations were not made as strongly, with the five -year outlook drifted up to 3.3%, which was one percentage point of 0.1 percentage points.
Overall, concerns about inflation overlap with lower optimism, since the headline index fell to 67.8, a one-month decline of 4.6% and a value of 11.8% compared to the same month ago a year ago. Economists surveyed by Dow Jones had searched for a reading of 71.3.
The survey is sometimes influenced by the shift in political winds. However, the HSU found that a declining mood “with Republicans, independent and democrats all decreases after January, together with consumers in age and asset groups.”
The stocks became lower after the report, with the Dow Jones Industrial Average initially scored almost 300 points.
“Higher prices from tariffs are the financial care of number one for Americans, since the weight of inflation is still for family budgets, especially among those with lower incomes,” said Robert Frick, corporate economist from the Navy Credit Union. “Even slight price increases, especially with top pain points such as food, protection and transport, would be perceived by millions.”
According to HSU, the general declines in the various surcharges are reflected in “perception that it could be too late to avoid the negative effects of collective bargaining policy”.
Of the current conditions -also sagged up to 68.7 or 7.2% lower than January and a decrease of 13.5% compared to the previous year. Expectations decreased to 67.3, with a decline of 2.9% and 10.5%.
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