Consumer sentiment slumps in March to lowest since 2022 as Trump tariffs spark more inflation worries

Consumer sentiment took another hit in March as worries intensified over inflation and a slumping stock market, according to the University of Michigan’s latest sentiment survey released Friday.

The survey posted a mid-month reading of 57.9, which represents a 10.5% decline from February and was below the Dow Jones consensus estimate for 63.2. The reading was 27.1% below a year ago and was the lowest since November 2022.

While the current conditions index fell a less severe 3.3%, the expectations measure for the future was off 15.3% on a monthly basis and 30% from the same period in 2024.

In addition, fears grew over where inflation is headed as President Donald Trump institutes tariffs against U.S. trading partners. New duties on aluminum and steel took effect Wednesday, and the president this week also threatened 200% tariffs on European Union liquor after the EU hit U.S. whiskey and other goods with 50% levies.

The one-year outlook spiked to 4.9%, up 0.6 percentage point from February and the highest reading since November 2022. At the five-year horizon, the outlook jumped to 3.9%, up 0.4 percentage point for the highest level since February 1993.

Stocks largely brushed off the report, holding in positive territory while Treasury yields moved higher.

Though the measure is often prone to disparities between parties, survey officials said sentiment slumped across partisan lines along with virtually all demographics.

“Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences,” Joanne Hsu, the survey’s director, said. “Consumers from all three political affiliations are in agreement that the outlook has weakened since February.”

Expectations fell 10% for Republicans, 24% for Democrats and 12% for independents, Hsu added. Sentiment overall has fallen 22% since December.

The inflation outlook contradicts reports earlier this week showing that consumer prices rose less than expected while wholesale prices were flat in February.

Markets largely expect the Federal Reserve, which aims for a 2% inflation rate, to stay on hold when it concludes its two-day meeting Wednesday. Traders, though, are pricing in 0.75 percentage point of interest rate cuts by the end of the year, starting in June, according to the CME Group’s gauge of futures pricing.

Correction: Joanne Hsu is the survey’s director. An earlier version misspelled her name.