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Americans' fears about their financial futures are worsening - consumer sentiment is cratering [1]
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Date: 2025-03-17
The University of Michigan surveys consumers to gauge their feelings about their prospects. A year ago, in the March 2024 survey, the Index of Consumer Sentiment stood at 79.4. To give that number context , the highest it has been this century was 112.0 in January 2000 — during the dot.com bubble. The lowest, 50.0, was in June 2022 — when the US experienced high inflation while the country was recovering from the depression of the COVID-19 pandemic. Considering that, let’s look at how the new administration is doing.
First, some background.
According to Trump, the GOP, conservative media, and MAGAs in general, in March 2024, Americans were living in the worst of all possible times, as they teetered on the precipice of economic calamity. The only thing that would save the country from shit-hole status was a Trump election and a Republican sweep of Congress.
Sufficient swing voters believed the MAGA/Russian propaganda to usher in Trump 2.0 along with a slavish Congress willing to rubber stamp Trumponomics.
However, getting elected comes with a downside. Now you’re in charge. And as hard as an incompetent blowhard may try to blame-shift, the swing voters expect you to do what you say you would. In this case, fix the supposedly broken economy as you had promised.
It didn’t take long for these flexible voters to realize that the inveterate liar had lied again. By month one of the new regime, February, consumer sentiment had declined from March 2024’s 79.4 to 64.7. That proved a high point for the country’s new management. By March, the number had dropped again to 57.9, a 10.5% decline in one month — and a 27.1% decline in one year. (As noted above, 50.0 is the record low — for now.)
University of Michigan survey of consumers
The Index of Consumer Expectations saw a similar softening. Note: ‘Sentiment’ is how people feel about their current situation. ‘Expectation’ is how they think about their prospects. In this case, as bad as people feel about today, they feel even worse about tomorrow.
This pessimism is hardly surprising. Trump has already walked away from his promise to reduce inflation, tout de suite. He has to. There is nothing in his plan that anyone can characterize as inflation-busting. It is hard to argue that adding cost to an item (tariffs) will lower prices (even if you believe the fantasy that foreigners pay them).
If tariffs did reduce prices, everyone would do them. They aren’t because increasing the cost of an item is how tariffs work. If tariffs didn’t raise the retail price, people would continue buying the same stuff they always have from China, Mexico, and Canada. So much for making America’s manufacturers great again.
For 45 years, the right has maintained that decreasing taxes on oligarchs and corporations leads to job creation and improved GDP growth. For 45 years, the evidence has contradicted that contention. The American consumer is finally beginning to see they were hosed.
However, that clear-eyed grasp of reality is sporadic. As periodically (2016, 2024), the consumer — in a triumph of hope over experience — will take a flyer on the losing proposition.
H.L. Mencken is famously credited with saying, “Nobody ever went broke underestimating the intelligence of the American people.” A century later it could equally be well said that no politician ever lost an election by underestimating the logical capacity of the average voter.
These numbers are a golden opportunity for an opposition party. But as the philosopher observed, “Democrats never miss an opportunity to miss an opportunity.” Imagine if the Democratic Party put its current leadership out to pasture and promoted some goddamn fighters. Liberals would make hay out of these dismal consumer numbers.
Will they do something? Or will they pursue the insanity of hoping the same old pusillanimous pussy-footing will produce a different result?
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