Consumer inflation fears spike in February as tariff worries hit sentiment
Consumers grew dramatically more worried about near-term inflation as President Donald Trump pushed aggressive tariffs against major U.S. trading partners, a closely watched survey showed Friday.
Consumers grew dramatically more worried about near-term inflation as President Donald Trump pushed aggressive tariffs against major U.S. trading partners, a closely watched survey showed Friday.
The University of Michigan consumer survey for February showed that respondents expect the inflation rate a year from now to be 4.3%, a 1 percentage point jump from January and the highest level since November 2023.
Though Trump postponed tariffs against Canada and Mexico, the looming threat of price pass-throughs to consumers shook sentiment. China has levied retaliatory tariffs following Trump’s move. The survey window ran from Jan. 21, the day after Trump took office, to Feb. 3.
“Many consumers appear worried that high inflation will return within the next year,” said Joanne Hsu, the survey’s director. “This is only the fifth time in 14 years we have seen such a large one-month rise (one percentage point or more) in year-ahead inflation expectations.”
Longer-run expectations weren’t hit as much, with the five-year outlook drifting up to 3.3%, a 0.1 percentage point gain.
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