You are currently viewing U.S. Consumer Confidence Crashes to 2022 Lows as Tariffs Trigger 6.7% Inflation Fear

U.S. Consumer Confidence Crashes to 2022 Lows as Tariffs Trigger 6.7% Inflation Fear

U.S. consumer sentiment tumbled to its lowest level in nearly three years in April 2025, as fears of inflation and economic slowdown surged following aggressive tariff policies. The University of Michigan’s Consumer Sentiment Index fell to 50.8—its weakest reading since June 2022—underscoring widespread economic anxiety.

Inflation Expectations Soar to Highest in Four Decades

Twelve-month inflation expectations among U.S. consumers jumped to 6.7%, the highest since 1981. The rise is largely attributed to President Trump’s imposition of 125% tariffs on Chinese imports, aimed at reshaping global trade. Consumers now anticipate sharp price increases in categories ranging from electronics to household essentials.

This inflation fear has filtered across all income and age groups, with many households cutting back on discretionary spending and delaying big-ticket purchases.

Retail Sector Braces for Impact

Major U.S. retailers are already feeling the pressure. 7-Eleven’s parent company, Seven & i Holdings, issued a cautionary statement on April 25 about cost restructuring in its U.S. operations. CEO-designate Stephen Dacus said higher tariffs and weakening consumer sentiment could force retailers to slash expenses to stay profitable.

Recession Probability Jumps to 45%

According to a Reuters survey, the chance of a U.S. recession within the next 12 months has surged to 45%, up from 25% last month. Analysts cite the dual threat of tariff-induced inflation and waning consumer demand as key drivers.

The trade uncertainty has also impacted business investment, hiring intentions, and financial market volatility.

Markets Reflect Growing Fear

  • Retail stocks have underperformed over the past week.
  • Bond yields dipped as investors shifted into safe havens.
  • Gold and other inflation hedges rallied.

As investor sentiment turns cautious, policymakers and corporations alike will be closely watching for a turnaround in spending trends and inflation data.

Disclaimer: This article is for informational purposes only and is based on publicly available data as of April 25, 2025. It does not constitute financial or investment advice.


Published by Paisonomics.com – Trusted voice in global macroeconomic updates and policy insights.

Paisonomics

Hi, I’m the creator of Paisonomics — a blog where finance meets clarity. I’m passionate about simplifying the stock market, personal finance, and economic concepts so anyone can make smarter money decisions. Whether you're a beginner investor or just financially curious, you’re in the right place.