US consumer sentiment drops to second-lowest level on record since 1952

United States consumer sentiment plunged 11% in April to a preliminary reading of 50.8, the University of Michigan said in its latest survey released Friday.

This marks the second-lowest reading on records going back to 1952. April’s reading was lower than anything seen during the Great Recession.

The sharp drop in sentiment comes amid rising concerns about inflation and the ongoing trade conflict between the U.S. and China. Economists have raised alarms about the growing risk of a U.S. recession, compounded by fears that the trade war could drive inflation even higher.

The survey also flagged a troubling increase in both short-term and long-term inflation expectations.

Wall Street stocks ended the week on a positive note, recovering from early losses after China imposed 125% tariffs on U.S. goods in retaliation for U.S. tariffs. Despite this, U.S. equities shrugged off the weakness, buoyed by hopes that the market had absorbed the worst of the trade conflict’s impact.

Decline in sentiment widespread

Joanne Hsu, the director of the University of Michigan’s survey, noted that the decline in sentiment was widespread, affecting all demographics, including age, income, education, geographic region, and political affiliation. “This decline was, like last month’s, pervasive and unanimous,” Hsu said in a statement.

Sentiment has now dropped more than 30% since December 2024, with concerns about the trade war continuing to weigh heavily on Americans’ outlook, Hsu added.

The survey also highlighted the negative impact of President Donald Trump’s trade war on consumer sentiment.

Trump’s announcement of sweeping tariffs on trade partners on April 2 initially sent financial markets into turmoil. However, the president reversed course on Wednesday, scaling back the tariffs to 10% for 90 days, while raising levies on Chinese goods.