It’s because of the tariffs that Americans feel lousy about the economy
The Reason Why Americans Feel So Lousy About the Economy:Trump Tax Cuts and Consumer Spending Confidence Are Another Way to Tell Them
As President Trump rolls out a new round of tariffs, shoppers are keeping a tight grip on their wallets, setting the stage for a possible economic slowdown.
The Commerce Department said personal spending was lower than expected in February.
And people across the political spectrum say they’re worried about their personal finances, unemployment and inflation, suggesting the president’s policies on tariffs and government job cuts are partly to blame. A survey by the University of Michigan found consumer sentiment fell in March for the third month in a row.
I don’t see that things are moving in the right direction. I really don’t,” says Dan Fitch, a nurse who works for the Veterans Administration in Portland, Ore. The cost of living has increased for a while. So adding on tariffs — I don’t see how that positively affects anybody.”
Money is Money: Buying a haircut for a toddler and cutting his hair with a clipper, or when you’re going on a vacation
While he and his family are usually on the road, they are not traveling as much. And he’s even stopped paying for haircuts for his 3-year and 7-year-old sons.
“I bought a pair of clippers and I’m cutting both my kids’ hair now. “I might start doing my own, too.” “It can get pretty ugly but it’s worth it for a little more peace of mind where your money is concerned.”
A new CBS News poll finds a majority of Americans think the president is focusing too much attention on tariffs and not enough on lowering prices. Although inflation has fallen substantially since peaking in 2022, consumer prices are still high — and are likely to climb even higher as tariffs take effect.
“I try to stick to a budget and it’s been very hard to stick to a budget,” says Kathy Merkler, a research laboratory coordinator in Tampa, Fla. I’m paying the same amount of money for fewer grocery bags.
The National Institutes of Health and the Center for Disease Control and Prevention have had their budgets reduced by the federal government. She and her husband have debated whether it’s a good time to replace their aging car, a 2015 Kia Soul.
The Fueling of Consumer Spending by the Taxes: An Empirical Study of the State of the Economy in the Post-Pendemic Era
Consumers were already facing elevated costs when financing new vehicles before the tariffs hit. One in five buyers of new cars take out seven-year loans to finance their purchase, which is a sign of increasing financial stress. A growing number of people have car loans that are more than they’re worth.
Consumer spending remains the most important factor in the U.S. economy and it has remained relatively unaffected by the high inflation that preceded the Pandemic. But now that consumer engine may be sputtering a bit.
“If you’re a consumer, you’re sitting there and saying, ‘I’m not so sure’ when it comes to the tariffs here,’ ” says Dan North, a senior economist. I’m not making as much money a little bit. By the way, I just opened my credit card bill and realized that I still have to pay off items from Christmas. I’m gonna draw my horns in a little bit.”
Spending has been unaffected by the threat of tariffs. Shoppers bought big-ticket items before the import taxes took effect. Spending increased on durable goods. They say that burst of spending is not likely to last.
Dawn Woodward, who works at a library, bought her son a TV weeks before his birthday to avoid tariffs. When it comes to other shopping, though, Woodward is trying to cut back.
Source: Tariffs are another reason why Americans feel so lousy about the economy
Anxious consumers in the era of Trump’s tariffs: New auto factories in the U.S. are turning away from panic shopping
The share of income people put into savings increased in February, reaching its highest level in eight months. It’s a sign of how anxious Americans are, as President Trump doubles down on tariffs.
The effect could be even more pronounced at the lower end of the market, with many of the most affordable vehicles from GM, Ford, Kia, and Hyundai produced outside the US. Affordability is already a huge problem for car buyers, with average transactions for new cars clocking in at $48,118 in January, according to market researcher Edmunds.
Carownership has been a hallmark of the American dream for decades. We built our communities around car ownership, squeezing out transit, and shrinking pedestrian spaces to make way for bigger and bigger vehicles. In the US, owning a car isn’t an option for most people.
Many people who were considering a car purchase are crowding into dealerships to take advantage of the low prices that are currently on offer. Most people don’t know how to think rationally as they watch the news with anxiety, which is why consumer experts say against panic shopping.
“It never pays to rush out and make a rash decision that you might regret,” says Jake Fisher, senior director of Consumer Reports’ Auto Test Center. “Even if the tariffs are here to stay, in a short time, the value of your trade-in will increase too.”
Some automakers are taking advantage of elevated inventories — the total number of new and used vehicles that dealers have for sale — to offer short-term incentives to panicked shoppers. Ford is offering employee discounts on most models including the Mustang Mach-E and Maverick, both of which are built in Mexico. The industry average for February is around three months, but Ford had more than four months of inventory.
The $21 billion investment by the company to the US was announced as a response to the tariffs. And others are taking a more drastic approach. More than 900 workers at five of the company’s US factories are being laid off, and production is being paused at assembly plants in Canada and Mexico.
Even Tesla, which is run by billionaire best buddy Elon Musk, is exposed to these new tariffs. The company assembles its vehicles in the US, but 20–25 percent of its parts are sourced from Mexico, according to a list of car part origins published by the National Highway Traffic Safety Administration.
Source: Trump’s tariffs are ‘a debacle of epic proportions’ for the auto industry
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is transportation editor with 10+ years of experience who covers EVs, public transportation, and aviation. His work has appeared in two newspapers.