U.S. Consumer Sentiment Hits New Low Amid Trade Policy Impact

Consumer sentiment in the U.S. has plummeted in May, reaching levels unseen since 1981, with inflation expectations soaring amidst growing fears over the economic repercussions of President Trump's trade policies. The University of Michigan's survey highlighted a notable drop in morale, even among Trump's supporters.

The declining sentiment, along with rising inflation expectations, suggests a slowdown in consumer spending. This could affect hopes for an economic rebound in the current quarter. The situation results from a surge in imports as businesses seek to dodge escalating tariff costs.

Economists warn of looming shortages as reduced port activities might lead to unavailability of goods. The sentiment index reflects these concerns, with Republicans showing a 7% sentiment drop. Though tariffs on Chinese imports have been reduced temporarily, consumers remain apprehensive about economic conditions.

(With inputs from agencies.)