Americans are increasingly worried that Trump's trade wars will damage the economy and eliminate jobs
- A closely watched gauge of consumer sentiment fell more than expected at the start of the month.
- Respondents to the University of Michigan's consumer survey expressed an increasing amount of concern about President Donald Trump's trade wars.
- "Consumers responded by lowering growth prospects for the national economy, and as a consequence, reduced the expected gains in employment," Richard Curtin, the survey's chief economist, said of tariffs.
Americans were much less optimistic about the outlook for the economy in early June as President Donald Trump's sprawling trade disputes added to concerns about a cooling labor market.
A closely-watched gauge of consumer sentiment fell to 97.9 at the beginning of the month from 100 in May, the University of Michigan's consumer survey indicated Friday, compared with expectations for a reading of 99. Long-term inflation expectations fell to 2.2%, the lowest reading since the survey was started more than four decades ago.
"Consumers responded by lowering growth prospects for the national economy, and as a consequence, reduced the expected gains in employment," Richard Curtin, the survey's chief economist, said of tariffs.
Hiring slowed more than expected in May, fanning concerns that the nearly decade-long expansion could be running out of steam. The economy added 75,000 jobs last month, according to the Labor Department, compared with expectations for an increase of 180,000 nonfarm payrolls.
Trump raised tariffs on China last month and has started preparing to hit a broader range of products, a move expected to increase prices for American businesses and consumers. He separately threatened to slap duties on all imports from Mexico, before backing down from those plans after declaring a deal on immigration.
"We're guessing that responses to consumer surveys in recent weeks have been heavily dependent on timing, given the chaotic announcement and then abandonment of tariffs on Mexican imports," said Ian Shepherdson, the chief economist at Pantheon Macroeconomics.
Economists, lawmakers, industry groups, and businesses have warned that tariffs threaten to harm relationships with major trade partners and act as a tax on Americans. On Thursday, 600 companies sent a joint letter to Trump saying that broader tariffs on China would hurt workers and consumers.