U.S. consumer sentiment unexpectedly dropped in February to its lowest level in seven months, with inflation expectations surging amid growing concerns over the impact of President Donald Trump’s threatened tariffs.
The University of Michigan’s Consumer Sentiment Index fell to 67.8, down from 71.1 in January, missing economists’ expectations, according to a Reuters poll. Households are increasingly worried that inflationary pressures could erode their purchasing power.
Short-term inflation expectations jumped to 4.3%, the highest since November 2023, up from 3.3% in January. Long-term inflation projections also edged higher, reaching 3.3%—a level not seen since June 2008—compared to 3.2% the previous month.
The report highlights growing consumer anxiety over price stability and economic uncertainty, factors that could influence future spending patterns.
