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Data: University of Michigan Surveys of Consumers; Chart: Axios Visuals

Consumer sentiment fell to its lowest level since October 2016 and dropped by the most since December 2012, according to a survey by the University of Michigan.

Why it matters: The decline in sentiment was attributed largely to negative references to tariffs and the U.S.-China trade war, said Richard Curtin, the survey’s chief economist. Tariffs were mentioned "spontaneously" as a negative force by 1 in 3 respondents.

What they're saying: “The August data indicate that the erosion of consumer confidence due to tariff policies is now well underway,” Curtin said. He added:

  • “Compared with those who did not reference tariffs, consumers who made spontaneous negative references to tariffs also voiced higher year-ahead inflation expectations, more frequently expected rising unemployment, and expected smaller annual gains in household incomes."
  • “This could result in a much slower growth in consumption and the overall economy.”

Of note: Michigan's data remains at historically high levels but has been falling consistently since May, while a measure of consumer confidence conducted by the Conference Board has been much more resilient.

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