Republicans are bored by Donald Trump's policies, recording the second highest measure of consumer confidence in the U.S. economy.
The overall index of consumer sentiment at the University of Michigan fell to 50.8 from 52.2 last month, while expectations fell to 46.5 because of fears that people will start to lose their jobs soon.
The poll also showed expectations for a surge from 6.5% now to 7.3% (the highest level since 1981) as people dared to bet that the Trump administration’s trade war would lead to price increases.
Long-term inflation expectations also rose to 4.6% from 4.4%, as registered Republicans are increasingly concerned about the lasting impact of tariffs on U.S. prices.
"The flag of inflation expectations is bright red," said Carl Weinberg, chief economist at high frequency economics.
The high expectation shown in Friday's survey was in the data showing inflation hit a four-year low of 2.3% in April. Thursday’s data showed producer prices fell last month, but the profit margins were squeezed as companies absorbed tariff-related costs.
The survey showed that consumer sentiment for registered Republicans fell from 90.2 to 84.2, the lowest reading since November. The index tracking their economic expectations fell from 95.9 to 90.8, with another six-month low.
Although the registration Democrats have long been negative for the president’s economic policy agenda, polls show that the chaos after Liberation Day has weakened global capital markets by trillions of dollars, which has also contributed to Trump’s support in his own party.
The readings were conducted between April 22 and May 13, meaning that the impact of détente between the United States and China a few days ago would not be considered for most respondents.
The truce has lowered tariffs on one of the U.S. largest trading partners from 145% to mid-August.
Even if a permanent deal between Washington and Beijing is reached, Americans can still pay more for the goods. Walmart CEO Doug McMillon warned that the world's largest retailers cannot "absorb all the pressure" and that "higher tariffs will lead to higher prices."
The final version will contain more information on whether the suspension of Chinese tariffs on May 12 affects expectations, pollsters said.
“It seems that households are more shocking to the suspension of reciprocity tariffs for other countries or the decline in energy prices than the Tit-Tat escalation of Chinese tariffs,” said Alexandra Brown, a North American economist in capital economics.
“Given the latest deal with China reverses most highly high tariffs, sentiment should rebound soon.”