How Tariffs Are Shaking U.S. Consumer Confidence
- CUPS Realty
- May 22
- 2 min read
In May 2025, U.S. consumer confidence dropped to 50.8, down 2.7% from April, according to the University of Michigan. This marks the fifth straight monthly decline and comes close to the all-time low of 50 in June 2022. The 20-year average stands at 79, highlighting just how weak current sentiment is.
A key factor behind the decline is the Trump administration’s new round of tariffs. Since January, confidence has fallen nearly 30%. In the latest survey, 75% of respondents mentioned tariffs, up from 60% in April, showing growing public concern over rising prices and economic uncertainty.
At the same time, inflation expectations rose sharply—from 6.5% to 7.3%, reflecting fears of higher living costs and weaker household spending.
Economic Outlook Weakens Further
The Current Conditions Index dropped to 57.6, its lowest since late 2022.
The Expectations Index fell to 47.3, a three-year low. Pessimism is widespread across age, income, and political groups.
U.S.–China Tariff Pause Not Enough
Although the U.S. and China agreed on a 90-day tariff rollback on May 12, sentiment didn’t improve much. The cut—from 145% to 30% on certain imports—offered only mild relief.
Labor Market Concerns Emerging
According to NerdWallet senior economist Elizabeth Renter, more households are reporting income loss. She warns that consumer strength may be fading, and job market risks are rising.
The months ahead will be key to understanding how tariffs, inflation, and employment shape the pace of any recovery.
👉 Want to explore more about recent tariff policies and their impact on consumers and industries? Read more:
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