Consumer sentiment increases rapidly during the trade war

Diving Briefs:

• Consumer sentiment plummeted 11% this month, and inflation expectations have risen to the highest level due to anxiety about the progress of the global trade war since 1981, the University of Michigan was found on Friday.
• The atmosphere between consumers has sinked more than 30% since December, as “worrying about trade wars” since December. Joanne HSU, Director of University ResearchSaid in the statement. Slump is “It is extensive and unanimously in the age, income, education, geographic and political alliances,” she said.
• “Consumers report a number of warning signals that increase the risk of economic downturn. Expectations for business conditions, personal finances, income, inflation, and labor markets have been deteriorated this month. The proportion of consumers has risen to the highest level since 2009.

Dive Insights:

teaHe ended on April 8 the day before Donald Trump announced a 90 -day suspension of mutual tariffs targeting almost all US trading partners. Trump maintained a mutual tariff on China’s imports and maintained a 10% tariff in dozens of countries announced earlier this month.

But after Trump’s pause, the trade war between the world’s largest economy has expanded. The United States urged China’s cumulative tariffs on imports a total of 145%, and Beijing urged to retaliate by raising the mission of all US imports to 125%.

JPMORGAN CHASE CEO Jamie Dimon warned of potential damage to the United States due to Friday, World Trade Disputes and other catastrophe.

Dimon said, “The economy is facing a significant turbulence (including geopolitics) through the potential and tariffs of tax reform and deregulation, the potential denial of the trade war, sticky inflation, high fiscal deficit, and still high asset prices and volatility.” In the report on JPMORGAN’s 1Q income.

According to the University of Michigan, consumers expect inflation to record up to 6.7%and 1.7%higher than last month. Long -term inflation expectations increased from 4.1%to 4.4%in March of this month.

“In order to ensure continuous price stability in the time of turbulence and this uncertainty, the expectation of well -fixed inflation is very important.” New York Federal Reserve Bank Chairman John Williams I said in Friday speech. The central bank is trying to keep the inflation to 2%.

Williams predicted that tariffs will promote inflation between 3.5% and 4% this year.

Given the “slowing of labor growth due to the combination of immigration reduction, uncertainty and tariffs,” he said, the growth of domestic gross domestic product will be slow to less than 1%.

In addition, according to Williams, who served as vice -chairman of the Federal Open Market Committee, the unemployment rate will rise from 4.5% to 5% from the current 4.2% level.

“A wide range of uncertainty is becoming more and more clear,” he said. “Consumer sentiment has decreased sharply and business feelings have also weakened.”

“In the absence of uncertainty, consumers can make a big decision, such as buying a house or a car, and a company can delay investment until it understands what the future is. “Williams said.

According to Wells Fargo economist, poor consumer sentiment does not necessarily predict the withdrawal of expenditure.

In Friday report, “Optimism is not a positive development of real spending, but it’s not hiding furniture.

After the epidemic, consumers have discouraged optimism and continued to spend, economists said. “American consumers have been found to be very flexible in recent years.”