By Justin Lahart and Ed Frankl
Consumer sentiment in the U.S. sank this month, as worries intensify over what the tariffs, government layoffs, funding cuts and immigration restrictions that President Trump has introduced might mean for the economy.
The University of Michigan’s closely watched index of consumer sentiment nosedived another 11% to 57.9 in mid-March from 64.7 last month, continuing a downward trend that has taken hold since Trump took office.
That marked the lowest level since November 2022, and was much weaker than the 63.2 that economists polled by The Wall Street Journal expected.
Compared with a year earlier, consumer sentiment is down 27%.
Pantheon Macroeconomics economist Samuel Tombs labeled the report “horrific” in a research note Friday, adding that “elevated economic policy uncertainty and the sharp drop in stock prices have greatly undermined consumers’ confidence.” Stocks have been falling for much of the last several weeks as investors try to parse out the administration’s back-and-forth tariffs plans.
Economists have been marking down their estimates for the economy, but still expect it to grow. On Friday, for example, JPMorgan Chase economist Mike Feroli said he now expects gross domestic product to grow at just a 1% annual rate in both the first and second quarters before picking back up. That was down from the start of the year, when he forecast GDP would grow at a 1.8% rate in the first quarter, and 2% in the second.
While drops in consumer sentiment don’t necessarily lead to declines in consumer spending, they can be potent warning signs. Particularly worrisome was a decline in the expectations component of the sentiment index, which fell 15%. Economists have found that the Michigan expectations index, based on how consumers expect the economy to progress over the next year, can help predict future spending.
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