American consumer confidence worsened again this week to a new historic low according to the CivicScience-Hamilton Place Strategies Economic Sentiment Index. The biggest factors of this decline can be traced back to widespread pessimism surrounding being able to find a new job and the U.S. Economy at large. Similar to last week, positive sentiment about making major purchases remains extremely low.
Tariffs are on the minds of U.S. consumers right now after the Biden Administration released trade policy strategy announcements earlier this month. Concern about the impact tariffs are having on household expenses is at an all-time high since CivicScience began tracking sentiment before the pandemic in mid-2019. In fact, Nearly 2-in-5 U.S. adults report that they’re actively buying less because of higher prices that they attribute to changes in trade policy and tariffs. This metric has nearly doubled since June 2019.
Unsurprisingly, inflation is another major area of concern now too. The Consumer Price Index inflation report from the Bureau of Labor Statistics released data earlier this month highlighting a 5.4% year-over-year increase in prices. The biggest drivers for inflation recently, according to the report, have been everyday needs – food, housing, and gasoline. This news has even prompted discussions around workers pushing employers for higher pay to simply keep up with inflation. CivicScience data show that right now, over half of U.S. adults are extremely concerned about inflation while 9 in 10 show some level of concern.
There’s also a correlation between inflation concerns and sentiment about making a major purchase right now – another reason why both are heading in a negative direction.
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