STATISTA: Consumer Confidence Plummets
by Felix Richter,
Mar 31, 2025
Consumer sentiment in the United States fell to the lowest level in more than two years in March, as uncertainty over tariffs, their effect on inflation and the overall economy are clearly weighing on Americans' minds. The latest results from the University of Michigan’s monthly Index of Consumer Sentiment showed a steep decline in consumer confidence for the third consecutive month.
The overall index, which is based on at least 600 telephone interviews per month and focuses on personal finances, business conditions and buying conditions, fell to its lowest level since November 2022 and is now approaching its all-time low recorded in June 2022, when inflation peaked at almost 9 percent. The latest decline was driven by an 18 percent drop in the Index for Consumer Expectations, which is based on two questions looking 12 months ahead and one question looking at the next five years.
“This month’s decline reflects a clear consensus across all demographic and political affiliations," Survey of Consumer Director Joanne Hsu wrote. "Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment, and inflation. Consumers continue to worry about the potential for pain amid ongoing economic policy developments."
You will find more infographics at StatistaSTATISTA: Americans Are Spending Less, Saving More
by Felix Richter,
Mar 31, 2025
After years of seemingly defying inflation and driving U.S. GDP growth, U.S. consumer spending showed signs of weakness in the first two months of 2025. After dropping more than 0.6 percent in January, real personal consumption expenditure barely bounced back in February, edging up just 0.1 percent or $16 billion on a seasonally adjusted, annualized basis.
The weaker-than-expected spending increase was driven by a decline in service spending - the first since January 2022 and a warning sign that consumers may be starting to cut back on discretionary spending. At the same time, consumers increased spending on durable goods, possibly making purchases earlier than planned to avoid higher prices widely expected as a consequence of new tariffs.
The latest report on Personal Income and Outlays also revealed that personal saving increased sharply for the second month in a row, as the personal saving rate, i.e. savings a s a percentage of disposable income climbed from 3.3 percent in December to 4.6 percent in February. While high personal savings can be a sign of excess disposable income, they can also be a sign of growing uncertainty. Consumers wary about the short-term economic outlook are more likely to postpone big purchases and shore up their savings, while confidence typically boosts spending.
You will find more infographics at Statistaby Felix Richter,
Mar 31, 2025
As the world is bracing for more tariff announcements on April 2, a day dubbed "Liberation Day" by President Donald Trump, Americans are increasingly wary about the effects that new tariffs will have on the average American. According to a recent survey conducted by YouGov on behalf of The Economist, 61 percent of U.S. adults think that raising tariffs would hurt the average American, while only 14 percent of respondents think that it would have a positive effect on them.
That's because Americans - still wary about inflation after three years of rising prices - broadly expect tariffs to further increase prices and thus inflict further financial pain on already inflation-stricken U.S. households.
While it's no surprise that Democrats overwhelmingly oppose the Trump administration's tariff plans, it is interesting to see that even Republicans are more likely to expect average Americans to suffer from new tariffs. 36 percent of Republican respondents expect Trump's trade policies to hurt the average American, while one 28 percent expect tariffs to help Average Joe.
You will find more infographics at Statista
When I was driving on State Route 2, the major road into Cleveland from Lake County, there was a large electronic sign "Tariffs are Taxes."
ReplyDeleteI suspect it probably comes from some of our shipping interests such as Morton Salt which supplies a lot of salt to the Ontario region.
These statistics seem to point toward recession. Trump and the Republicans will be seen as the cause of that recession. Of course, Trump can always revoke his tariffs and claim victory.
I still think the Republicans will lose the House in 2026. One of the local banks advertises itself as being "boring for the last hundred or more years" and notes that "get rich quick" is usually followed by "scheme." I suspect that no matter how wonderful his supporters think the Trump entertainment show is, the majority of Americans will decide that they don't want to risk their pocketbooks on his kind of entertainment.
I checked my credit union savings account. My pension direct deposit was there on time. Whether it’ll arrive at the end of April, Lord knows. My consumer confidence is way down. Our economy is being massively doodled with by a crew of femtobrains. We’re all participants in “The Apprentice” now whether we like it or not. I guess the show has been rechristened “Project 2025”. There may not be a 2026.
ReplyDeleteYes - tariffs are taxes and add to prices.
ReplyDeleteThe Index of Leading Indicators is a composite of ten measures that are supposed to aid in forecasting future shifts in the economy. The Consumer Confidence index is important because when consumer confidence declines, spending usually follows. The US economy as measured by GDP is more heavily weighted to consumption than most other developed economies. C is about 68-70% of our GDP. ([GDP = C+I+G+(X-M)]. C is consumption, I is Investment ( as in business expenditures), G is government spending, and the balance of trade ( exports - imports) is the final component. So if consumer confidence declines and consumer spending follows, AND government spending also declines, the economy could be heading for a recession. The rule of thumb used to be that if the Index of Leading Indicators falls three months in a row a recession is highly likely. After rising strongly during the 6 months ending last Dec 31: it fell in January, and in February, by even more than expected. If it falls again in March it will be a very bad sign.
It is also probable that the trade war will reduce our exports as much or more than reduce imports, leading to domestic job losses and even less consumer spending. Some forecasters are now saying that it might be even worse than a recession - it could become stagflation, particularly since tariffs on imports are likely to worsen inflation. Remember Jimmy Carter? Stagflation is why he lost his re-election bid.
A lot of farmers here grow soy beans. China was a big customer for soy beans. With the tariffs on China, they have turned more to Brazil for buying soy beans.
ReplyDeleteWe were looking at possibly replacing one of our cars next year. But car prices, even for used cars, are likely to increase. We are probably going to keep what we have a while longer.
A recession, and/or stagflation is becoming likely.
But what I am more worried about are ICE tactics, in which plain clothes agents wearing masks are basically kidnapping people. There are even some criminals getting into the act by pretending to be ICE agents.
Trump is so caring of normal Americans that he is asking them not to buy cars now - before the tariffs kick in! Be patriotic and wait to buy that car even though it might cost another $10k for a new car.
DeleteAmerican taxpayers coughed up $ billions to save the farmers during the first administration ( because of the tariffs costing them their biggest export markets) and now he’s saying that we will have to do it again. After all, he doesn’t want to lose their votes - even for 2026 for Congress, assuming that we actually have real elections then. And from what I read, the farmers right now are furious. Partly because of the trade war, and partly because many invested tens of thousands ( often more than $100k) to buy equipment to improve efficiency and sustainability under a program that had the federal govt reimbursing them for half the costs - but after the fact, maybe in their taxes. But that program was axed and now the farmers who went ahead and invested ( sometimes borrowing money to do so) have been left holding the entire bill. Sustainability is in the dirty words list apparently. Also our government has subsidized grain farmers for decades after the Food for Peace program was set up under PL 480 - buying the wheat to prop up prices for farmers and to make sure that low prices didn’t result in the farms switching to other crops - and shipping it as a major component of our foreign aid. Now that our foreign aid is pretty much limited to giving weapons to Israel, I’m wondering if the Food for Peace shipments have also stopped - distribution was usually handled by USAID.
Nebraska congressman Don Bacon posted an op ed article in the New York Times this morning, titled "Fellow Republicans, and President Trump, we must stand up to Putin"
ReplyDeletehttps://www.nytimes.com/2025/03/31/opinion/ukraine-putin-trump-republicans.html
I don't know if it will have any effect. But cracks are starting to appear in the Republican tectonic plates.
Tariffs...siding with Russia...slamming the door (and showing the door to) immigrants...the GOP has become the polar opposite of what it was up until about 10 minutes ago. On Tuesday, I am serving as a Republican election judge for municipal elections. I suspect I'm going to pre-emptively apologize to every voter for wearing a badge identifying me as a Republican. I hate what the party has become, and I hate what the country is becoming.
ReplyDeleteI wonder if the church will find a voice to speak out. I'm starting to find mine.
Jim, don’t hold your breath on the Church speaking out. And welcome to the Politically Homeless Club.
DeleteSuppressing freedom of speech, freedom of the press, ignoring the rule of law and the Constitution, and the judiciary - and now openly racist (I guess he doesn’t feel that he has to pretend anymore). Even worse - half the country is just fine with it all.
April 5 is a big protest day. There will be protests all over the country, including DC. Federal employees still with jobs had best leave their phones at home or turn them off AND wrap them in foil. Uncovered faces, I don’t know how you get around that. I’ll be going to the protest in downtown Stroudsburg. Even though I’m retired and pensioned, I still don’t feel secure. You can never be too paranoid these days.
DeleteGood luck at the protest, Stanley. I hope you won't have any problems. I'm praying that no violence will happen at any of the locations.
DeleteThanks, Katherine. Been to two so far without any problems. I feel the longer this circus goes on, the stronger the anti-Trump movement will become.. Americans seem to care more about economics than free speech and democracy but that’s on its way.
DeleteJim, off subject, we heard the news yesterday that our new archbishop designate, Bishop Michael McGovern, is from your neck of the woods. He is presently bishop of the Belleville diocese, but grew up in the Chicago area. He attended Loyola University Chicago for his undergraduate degree.
ReplyDeleteWe are sorry to lose Archbishop Lucas, but have read good things about Bp.McGovern. He was ordained by Cardinal Bernardin in 1994, and consecrated as bishop in 2020 by Cardinal Cupich.
Archbishop Lucas plans to stay on Omaha in retirement.
Hi Katherine, thanks for the heads-up about Bishop McGovern. Even though he is from the Chicago Archdiocese originally, I confess I've never met him and don't know much about him. From what I read online, he cleaned up some abuse issues in the Belleville diocese, which seems hopeful.
DeleteDid things go smoothly with the municipal election yesterday?
DeleteYes, pretty drama-free, which is how it usually goes around here. There was a little part of me that wondered whether any MAGA types would storm in and insist, per the president's silly executive order, that voters present proof of citizenship. But nothing like that happened. There was one voter who insisted that people could lie about their eligibility to vote, but she didn't make such a big deal about it that it disrupted anything, and she didn't mention the president's executive order. I will mention that I noticed a police presence, both in our precinct and in the collection center where we drop off the ballots, which I hadn't observed in previous elections.
DeleteTurnout was high (by the standards of a municipal election). Before voting started on Tuesday, we all guessed how many voters we'd get. I guessed 100; nobody else guessed more than 50. In the event, we had reached 100 by noon, and had 180 by the end of the day. Our town is being considered by the Chicago Bears as a place to build a new football stadium, so there is some interest in who runs the municipality.
The stupidity of the tariffs has me sputtering with rage. Trump has people around him - certainly including the Sycophant-In-Chief JD Vance - who know better.
ReplyDeleteI heard Trump, a couple of years ago, say to a reporter that he understands that tariffs don't work. Obviously his thinking has changed since then.
Jim, I don't think Trump's thinking has changed since then (has he ever been known to misrepresent his intentions?) I believe tariffs are always what he wanted to do (because he's an economic genius!) And now there is no one around him who is willing to push back in any meaningful way on it.
DeleteI told some friends that I think his ego and narcissism are such that he considers himself exempt from the rules and strictures that govern lesser mortals. His notorious statement along the lines of 'I could shoot someone dead on 5th Avenue and get away with it' is a window into his soul. Just as be beat all the criminal cases and two indictments, I think there is a part of him that believes that the laws of economic behavior will fall in subjugation at his feet and allow themselves to be molded to his all-powerful will. Thus tariffs will no longer cause markets to fall, economic activity to contract, wages to stagnate and unemployment to rise. Because that is not what the Great Man wishes.
DeleteI read a thing by Senator Chris Murphy, he thinks the tariffs are a means by Trump to force private industries to pledge loyalty to Trump in return for tariff relief.
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