Trade War Fears Hammer US Consumer Expectations; FTSE 100 in Longest Winning Run Since 2019

US Consumer Confidence Falls to a Thirty-Year Low

The mood among the US consumer has taken a sharp turn for the worse. According to the University of Michigan’s consumer expectations index, confidence has dropped by 32% since January. This marks the lowest point in three decades, a decline not seen since the recession of 1990. The main cause is the growing fear over trade wars combined with rising inflation that hits household budgets hard.

US consumer sentiment has plummeted to levels last seen during the early 1990s recession, reflecting deep worries over tariffs and inflation. When US consumers feel confident, they tend to spend more. This spending boosts the economy. But when consumer confidence drops, people cut back on shopping and other expenses. Now, trade tensions and uncertain tariffs make many Americans hesitant to make larger or extra purchases. This slowdown in spending could hurt economic growth and raise the risk of a recession.News

How Trade Wars Affect US Households and Spending

Trade wars do more than disrupt international relations. They directly impact the US consumer by making everyday goods more expensive. Tariffs placed on imports act like a hidden tax. Experts estimate that by 2025, these costs could add about $1,300 to the average American household’s yearly expenses.

The increasing costs due to tariffs weigh heavily on the economic health of U.S. consumers. Here’s what the trade wars mean for US households:

• Retaliation tariffs by countries like China, Canada, and the EU could shave off 0.2% from US GDP.
• Tariffs raise costs for businesses, which often pass those costs to consumers through higher prices.
• Higher prices on goods and raw materials push inflation up, cutting into disposable income.

Because tariffs add to the price of many products, US consumers face tighter budgets. When money is tight, people tend to buy less, especially items they don’t need right away. This can slow down economic recovery by reducing demand. To dive deeper into the economic impact of these tariffs, a detailed research article from the Tax Foundation explains how these trade policies act as significant tax increases for U.S. households, driving inflation and restraining GDP growth:
Trump Tariffs: The Economic Impact of the Trump Trade War Moreover, the Center for American Progress highlights that these tariffs disproportionately hurt lower-income households by increasing prices and cutting disposable incomes, which could exacerbate inequality and slow economic progress:
Trump’s Trade War is a Major Economic and Strategic Blunder For a comprehensive look at how the trade war escalated after tariffs took effect, watch this news report detailing China’s retaliatory tariffs and their effects on American consumers and businesses: Understanding the Impact of the Trade War: How China Escalated U.S. Trade War after Trump’s Tariffs Took Effect

This video explains how China’s increased tariffs on U.S. goods hit American consumers by raising prices on imports.

FTSE 100 Surges as US Consumer Confidence Wanes

While US consumers grow cautious, international investors look to safer bets. The FTSE 100, the UK’s top stock index, is enjoying its longest winning streak since 2019. This rise is fueled by investors moving money into sectors that hold up well in uncertain times, like consumer staples and healthcare. Why is the FTSE 100 doing well?

• UK companies often offer strong dividend yields, which attract income-focused investors.
• Sectors such as healthcare tend to stay steady even when markets shake.
• Funds are shifting away from US markets as worries over trade wars mount.

This pattern highlights a shift. Investors are growing uneasy about the US economy and are choosing safer sectors abroad. The contrast between struggling US consumer sentiment and rising UK stock markets shows how global money moves in response to uncertainty.

What People Are Saying on Social Media and From Analysts

On platforms like YouTube and Twitter, many are talking about the toll trade wars take on the US consumer and economy. Analysts warn that long-term uncertainty could hurt business investment and job growth. Consumers are advised to budget carefully and focus on essential spending. Key points from social media and experts include:

• Businesses may hold back on hiring or expanding due to trade worries.
• Consumers should tighten their budgets to protect financial health.
• Diversifying investments can reduce risk when trade policy swings markets unexpectedly.

Some discussions highlight how certain parts of the economy cope better than others. This shows how linked trade policy and consumer confidence really are.

What Happens Next for the US Consumer?

The big drop in US consumer confidence signals trouble ahead. Higher costs from tariffs and inflation make it hard for many families to spend as freely as before. If spending slows down too much, it could drag the economy into a recession.

Despite the challenges, some US consumers are still managing to keep spending, though the overall sentiment remains weak. Meanwhile, the FTSE 100’s steady gains point to investors seeking stability elsewhere. They favor sectors less affected by trade issues, showing how important clear trade policies are. To help US consumers regain confidence and boost the economy, a few things must happen:

• Cut tariffs and work on trade deals that improve market access.
• Control inflation to ease pressure on household budgets.
• Create steady economic policies that encourage people to spend.

If these steps are taken, the US consumer can once again drive growth. Confidence can come back, helping families, businesses, and the economy as a whole steer through uncertain times.

By understanding how trade wars shape everyday life, US consumers can better prepare and adjust. Awareness of changing market trends and smart financial choices can help reduce the impact of these global challenges on household spending.