Tariff worries drive US consumer pessimism to 4-year high: Report
Rising tariffs and cost concerns have led to growing financial worry among Americans. According to TransUnion's Q2 2025 Consumer Pulse study, 27 per cent of US consumers feel pessimistic about their finances over the next year—up from 21 per cent in late 2024 and the highest level since tracking began in early 2021.
Despite the rise in pessimism, 55 per cent of consumers are optimistic about their household finances over the next 12 months – the same percentage as in Q2 2024. However, optimism has declined from 58 per cent in Q4 2024. The youngest consumers surveyed – Gen Z and Millennials – remain most optimistic about future finances, at 67 per cent and 64 per cent, respectively. The findings are derived from a survey of 2,998 American adults.
'Since early April, there has been a marked increase in the level of uncertainty about future costs primarily due to the ongoing discussions about tariffs,' said Charlie Wise, senior vice president and head of global research and consulting at TransUnion . 'While we've seen a rise in pessimism about future finances, it can't be overstated that the same percentage of Americans are as optimistic about their future finances today as they were at this same time last year. We posit this is happening because of the continued strong employment picture and sustained wage gains. If you have a job and feel like you're likely to get some form of pay increase over the next year, then you also will likely be able to manage through most possible scenarios for increases in the costs of goods and services.'
TransUnion's Q2 2025 Consumer Pulse finds 27 per cent of US consumers are pessimistic about their financesâ€'the highest since 2021â€'amid tariff fears and rising costs. While 55 per cent remain optimistic, concerns over inflation, recession, and tariffs are growing. Younger generations are most hopeful, and many tariff-worried consumers plan to seek credit.
Nearly nine in 10 Americans (87 per cent) reported some level of concern about the impact of current or possible tariffs on their household finances; 41 per cent said they were very concerned. To that end, the Consumer Pulse study found that consumers now have an increasing interest in securing credit products.
Of those consumers who were very concerned about tariffs, 37 per cent planned to apply for new credit or refinance existing credit in the next year, a higher rate than all others (30 per cent) who planned the same. Liquidity credit products which provide access to cash, including credit cards and personal loans, appeared to be a greater preference for those who are tariff concerned. Specifically, this group is interested in increasing available credit on existing credit cards, applying for a personal loan and using buy now, pay later payment services.
'When there is uncertainty in the market, this often results in consumers seeking new credit to ensure they are prepared for any future financial hurdles. While it's not clear just how much of an impact tariffs will have on consumer wallets, it is clear that those consumers who are most concerned about them are more likely to be preparing for the future through myriad credit options,' said Wise.
While inflation continues to be the top financial concern of Americans – 81 per cent ranked it as a top 3 concern in the next 12 months – there was a pronounced increase in fears of a recession. This metric jumped seven percentage points from Q2 2024 with 52 per cent saying it was in their top 3 financial concerns over the next 12 months — its highest level in two years. In Q4 2024, fears of a recession stood at 43 per cent.
'Fears of a recession should never be discounted. However, history has a way of repeating itself. To this end, consumers are being pragmatic and considering the news of the day. As tariff discussions bring uncertainty, so do increased fears of economic setbacks. Yet, just like we saw in the second quarter of 2023, there are a lot of positives about the economy and the consumer credit market at-large. One thing is certain – we should expect to see more shifts in consumer sentiment in the coming months,' concluded Wise.
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