U.S. Consumer Confidence Drops to 7th Lowest Level Since 1952 Amid Inflation, Trade Fears

Consumer confidence in the United States has once again declined, according to the latest survey released by the University of Michigan. The final value of the consumer confidence index for this month dropped to 55.1, ranking seventh lowest in history since 1952. The primary reason for the pessimistic outlook among Americans remains the same as in previous months: concerns over escalating inflation, which could be exacerbated by the Trump administration's aggressive trade policies. On Thursday, the Trump administration announced new tariffs on trucks, furniture, and pharmaceuticals.

In addition to inflation, Americans are now also worried about the labor market. The director of the University of Michigan survey stated that consumers continue to express dissatisfaction with the persistent high prices, with 44% of respondents mentioning that high prices are eroding their personal financial situation, the highest proportion in a year. The interviews this month highlighted a fact: consumers are facing the dual pressure of potential inflation and a weakening labor market.

Despite the decline in consumer confidence, data released by the U.S. Department of Commerce on Friday showed that personal consumption expenditures increased by 0.6% month-on-month in August, a crucial period for back-to-school shopping. Even after adjusting for inflation, consumption expenditures still grew by 0.4% last month. A representative from the Federal Reserve Bank of Richmond stated that recent data shows that consumers have resumed spending during the summer, particularly among high-income groups. This is not surprising, as the unemployment rate remains low, nominal wages continue to rise, and asset valuations are near historical highs.