Latest news with #GreatRecession
USA Today
11 hours ago
- Business
- USA Today
Long-term unemployment hits 2-year high as hiring slows amid economic uncertainty
When Jessica Chibuzor-Muko graduated from college a year ago, she figured her degree in cybersecurity – one of the hottest fields – would serve as a ticket to a near-certain job at a good salary. Then she ran into the brick wall known as the 2025 U.S. job market. After more than 3,000 applications, five interviews and zero job offers, her excitement has congealed into something closer to a beaten-down stupor. 'After your get your first 50 rejections, you're running to your mom crying,' says Chibuzor-Muko, who is 22 and lives in Denton, Texas. 'Eventually, you become very numb to it.' Recently, she took a break from the job hunt, got a part-time position as a nurse's notetaker and is considering a new career path – medicine. Need a break? Play the USA TODAY Daily Crossword Puzzle. 'I've always wanted to get a master's,' she said. 'Maybe I should look at medical school.' Chibuzor-Muko is among the 1.7 million Americans who have been out of work six months or longer – the most in more than two years – classifying them as long-term unemployed, the Labor Department's April jobs report showed. Their growing ranks defy the common perception that the job market remains healthy despite the uncertainty spawned by President Donald Trump's sweeping import tariffs. The long-term jobless now make up nearly a quarter of all unemployed workers. That's well below their 45% share during the depths of the Great Recession in 2010 and 43% during the COVID downturn in 2021. But it also marks a two-year high and exceeds the 20% of unemployed workers they comprised in early 2020 just before the health crisis. Economists say that's a concern because long spells of unemployment can affect the course of workers' careers, especially for recent college graduates and other new entrants to the labor market. 'I definitely think there's a stigma to being unemployed for long periods,' said Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research. Is the job market good or bad now? It's unusual for so many people to be out of work so long in a seemingly sturdy labor market. Job growth averaged a robust 181,000 in March and April and the unemployment rate is a historically low 4.2%. Friday, Labor is expected to report a solid 150,000 job gains for May, according to estimates by Barclays and Capital Economics. But forecasters largely attribute the rosy figures to business' continued reluctance to lay off workers following pandemic-related labor shortages from 2021 to 2023. Initial claims for unemployment benefits, a reliable gauge of layoffs, unexpectedly surged the week ending May 24 but remain historically low. What is going on with hiring right now? At the same time, companies have pulled back hiring. That trend began more than a year ago as sharp employee pay increases and high interest rates combined with flattening consumer demand to squeeze firms' profits. It intensified this year as Trump's tariffs threatened to reignite inflation, further narrow corporate profit margins and possibly trigger a recession in the months ahead. 'The economy was going to slow regardless' after a post-COVID-19 burst of demand, Hershbein said. "(Tariffs) made the problem worse.' The 5.4 million U.S. hires in March was down from a peak of 6.8 million in November 2021 and 5.8 million in late 2019 before the pandemic. The upshot: While not many people are losing jobs, those who do are struggling to find new roles as they join a slowly widening river of unemployed job seekers who are vying against each other and employed Americans for a limited stock of vacancies. 'Getting back into employment after you've been unemployed is getting increasingly difficult,' said economist Dante DeAntonio of Moody's Analytics. In May, the average number of applications job hunters submitted on LinkedIn was 45% higher than the year ago figure, the networking site says. While companies are replacing employees who leave, 'they're not necessarily adding staff,' said Brandi Britton, an executive director at Robert Half, a recruiting firm. 'Employers are definitely proceeding with caution' amid the uncertainty sparked by trade conflicts. How is the job market for college grads? Unemployed job seekers broadly are paying the price but the hiring chill is especially affecting new entrants to the labor force as well as workers returning after leaving to care for a child or other reasons, Hershbein said. So far this year, the number of 20 to 24-year-olds who are long-term unemployed is up 32% compared to the same period in 2019, versus a 19% rise for similarly idled workers of all ages, Labor Department figures show. During a period of limited hiring and pervasive uncertainty, 'You want people with a track record,' Hershbein said, describing the view of many employers. 'It's just a lot of silence' Chibuzor-Muko, the May 2024 graduate, said she frequently responds to job ads seeking entry-level candidates but companies later reveal they prefer that applicants have three to five years of experience. 'What really is entry level?' she asked. 'I just graduated.' Britton, of Robert Half, said many businesses 'want someone with work experience at an entry-level salary' as they try to conserve cash and minimize risk. And because of the cooling labor market, they generally can get what they want, she said, advising job candidates to 'be adaptive and flexible' and drop demands to work remotely or hybrid if necessary. After she graduated, Chibuzor-Muko said she applied to cybersecurity jobs 'every single day, the second I woke up….I treated it as my job.' But after several months of rejections, her enthusiasm waned, she said, adding she didn't get responses from most employers. This year, Chibuzor-Muko has taken classes online in the hope of qualifying for the more plentiful crop of openings for data analysts. She snared two interviews but no offers. What are the side effects of long-term unemployment? Long-term unemployment can become a self-perpetuating cycle even for experienced workers, Hershbein said, noting some companies believe the skills of long-sidelined job seekers may dull. The dilemma, he said, is amplified for recent graduates who may take the first offer they receive and find themselves overqualified for the job. 'It can have a long-term impact on the money you're able to earn and the companies you're able to work for,' he said. DeAntonio downplayed the concern, saying that while that was a big worry during the Great Recession, today's job market is more resilient and should pick up swiftly after tariff-related uncertainty fades. 'I'd think some of those negative effects will be minimized,' he said. Experienced jobless workers, meanwhile, are also struggling. In mid-May, 1.9 million Americans received ongoing unemployment benefits – indicating they had been laid off – the most since November 2021. 'I had no idea it would take this long' When Kiersten Ortiz-Cole of Houston lost her marketing job at a recruiting agency last August, she figured she would land a new position within a couple of months. Although her firm was chopping workers, its clients were still spending money, seemingly reflecting a stable economy and labor market. 'I had no idea it would take this long,' said Ortiz-Cole, 37, who has nearly a decade of marketing experience. At first, Ortiz-Cole sent out five to 10 applications a week, tailoring each to the relevant employer. But she found that companies were being especially selective, requiring candidates not only to have a marketing background but experience in that company's industry. She also has been frustrated by the job market's seasonal ebbs and flows, Last fall, many businesses dragged their feet on hiring because of uncertainty related to the presidential election and then because of the holidays. Employer interest picked up in January and February but then slowed again in March due to Trump's tariffs. 'It's just been a rollercoaster,' she said. Early this year, she decided to focus more on burnishing her skills through online marketing courses, connecting with people she knows on LinkedIn and attending networking events for marketing professionals. But the latter strategy fizzled when most of the attendees turned out to be unemployed themselves. They 'were in the same boat as I was,' she said. Ortiz-Cole has notched seven or eight interviews and twice made it to the third round. But one hiring manager told her he still had 600 resumes to review. And when job postings pop up on LinkedIn, they often draw about 100 applications within a couple of hours, she said. 'It's extremely discouraging and deflating because you don't have any control,' she said. In January, she began several rounds of interviews with a company over three months, feeling confident it would culminate in a job offer. But a candidate who was already working got the position. 'That was my low point,' she said. 'Living day by day' Ortiz-Cole's unemployment benefits have long run out. She and her husband, who is employed, were already 'living paycheck to paycheck' before her layoff to afford their mortgage and daycare for their 5-year-old son, she said. She has increasingly excised small pleasures from her life: streaming services, ordering dinner deliveries a few times a week, clothes shopping and a morning coffee from a local shop. She burned through most of her 401(k) money to pay off a car loan and maxed out her credit cards. 'We're constantly having conversations,' she said. 'We're living day by day and prepared to make whatever necessary cuts we have to make.' She said she's cautiously optimistic hiring will perk up soon but employers don't seem to have any clearer picture. As recently as early April, myHR Partner, a human resources consulting firm, planned to add nine employees to its staff of 41, said Tina Hamilton, who owns the Bethlehem, Pennsylvania-based company. But after Trump announced global reciprocal tariffs on April 2, demand for her hiring services plunged 50%, she said. While revenue from its payroll, employee relations and other HR services is up this year, its overall sales are flat because of the hiring pullback, prompting Hamilton to scale back her own hiring plans. She's looking to add just one or two employees in 2025. 'It happened almost suddenly,' she said. The trade war, meanwhile, has been in near-constant flux. This week, an international trade court struck down most of Trump's reciprocal fees but they remain in place while officials appeal the ruling. And Trump could adopt other legal strategies to impose tariffs, experts say. 'Nobody knows what to believe,' Hamilton said. 'Everyone's delaying… everyone's waiting.'
Fast Company
12 hours ago
- Business
- Fast Company
Want to lower your dementia risk? Start by stressing less
The probability of any American having dementia in their lifetime may be far greater than previously thought. For instance, a 2025 study that tracked a large sample of American adults across more than three decades found that their average likelihood of developing dementia between ages 55 to 95 was 42%, and that figure was even higher among women, Black adults and those with genetic risk. Now, a great deal of attention is being paid to how to stave off cognitive decline in the aging American population. But what is often missing from this conversation is the role that chronic stress can play in how well people age from a cognitive standpoint, as well as everybody's risk for dementia. We are professors at Penn State in the Center for Healthy Aging, with expertise in health psychology and neuropsychology. We study the pathways by which chronic psychological stress influences the risk of dementia and how it influences the ability to stay healthy as people age. Recent research shows that Americans who are currently middle-aged or older report experiencing more frequent stressful events than previous generations. A key driver behind this increase appears to be rising economic and job insecurity, especially in the wake of the 2007-2009 Great Recession and ongoing shifts in the labor market. Many people stay in the workforce longer due to financial necessity, as Americans are living longer and face . Therefore, it may be more important than ever to understand the pathways by which stress influences cognitive aging. Social isolation and stress Although everyone experiences some stress in daily life, some people experience stress that is more intense, persistent or prolonged. It is this relatively chronic stress that is most consistently linked with poorer health. In a recent review paper, our team summarized how chronic stress is a hidden but powerful factor underlying cognitive aging, or the speed at which your cognitive performance slows down with age. It is hard to overstate the impact of stress on your cognitive health as you age. This is in part because your psychological, behavioral and biological responses to everyday stressful events are closely intertwined, and each can amplify and interact with the other. For instance, living alone can be stressful— particularly for older adults —and being isolated makes it more difficult to live a healthy lifestyle, as well as to detect and get help for signs of cognitive decline. Moreover, stressful experiences—and your reactions to them—can make it harder to sleep well and to engage in other healthy behaviors, like getting enough exercise and maintaining a healthy diet. In turn, insufficient sleep and a lack of physical activity can make it harder to cope with stressful experiences. Stress is often missing from dementia prevention efforts A robust body of research highlights the importance of at least 14 different factors that relate to your risk of Alzheimer's disease, a common and devastating form of dementia and other forms of dementia. Although some of these factors may be outside of your control, such as diabetes or depression, many of these factors involve things that people do, such as physical activity, healthy eating and social engagement. What is less well-recognized is that chronic stress is intimately interwoven with all of these factors that relate to dementia risk. Our work and research by others that we reviewed in our recent paper demonstrate that chronic stress can affect brain function and physiology, influence mood and make it harder to maintain healthy habits. Yet, dementia prevention efforts rarely address stress. Avoiding stressful events and difficult life circumstances is typically not an option. Where and how you live and work plays a major role in how much stress you experience. For example, people with lower incomes, less education or those living in disadvantaged neighborhoods often face more frequent stress and have fewer forms of support—such as nearby clinics, access to healthy food, reliable transportation or safe places to exercise or socialize—to help them manage the challenges of aging As shown in recent work on brain health in rural and underserved communities, these conditions can shape whether people have the chance to stay healthy as they age. Over time, the effects of stress tend to build up, wearing down the body's systems and shaping long-term emotional and social habits. Lifestyle changes to manage stress and lessen dementia risk The good news is that there are multiple things that can be done to slow or prevent dementia, and our review suggests that these can be enhanced if the role of stress is better understood. Whether you are a young, midlife or an older adult, it is not too early or too late to address the implications of stress on brain health and aging. Here are a few ways you can take direct actions to help manage your level of stress: Follow lifestyle behaviors that can improve healthy aging. These include: following a healthy diet, engaging in physical activity and getting enough sleep. Even small changes in these domains can make a big difference. Prioritize your mental health and well-being to the extent you can. Things as simple as talking about your worries, asking for support from friends and family and going outside regularly can be immensely valuable. If your doctor says that you or someone you care about should follow a new health care regimen, or suggests there are signs of cognitive impairment, ask them what support or advice they have for managing related stress. If you or a loved one feel socially isolated, consider how small shifts could make a difference. For instance, research suggests that adding just one extra interaction a day —even if it's a text message or a brief phone call —can be helpful, and that even interactions with people you don't know well, such as at a coffee shop or doctor's office, can have meaningful benefits. Walkable neighborhoods, lifelong learning A 2025 study identified stress as one of 17 overlapping factors that affect the odds of developing any brain disease, including stroke, late-life depression and dementia. This work suggests that addressing stress and overlapping issues such as loneliness may have additional health benefits as well. However, not all individuals or families are able to make big changes on their own. Research suggests that community-level and workplace interventions can reduce the risk of dementia. For example, safe and walkable neighborhoods and opportunities for social connection and lifelong learning—such as through community classes and events—have the potential to reduce stress and promote brain health. Importantly, researchers have estimated that even a modest delay in disease onset of Alzheimer's would save hundreds of thousands of dollars for every American affected. Thus, providing incentives to companies who offer stress management resources could ultimately save money as well as help people age more healthfully. In addition, stress related to the stigma around mental health and aging can discourage people from seeking support that would benefit them. Even just thinking about your risk of dementia can be stressful in itself. Things can be done about this, too. For instance, normalizing the use of hearing aids and integrating reports of perceived memory and mental health issues into routine primary care and workplace wellness programs could encourage people to engage with preventive services earlier. Although research on potential biomedical treatments is ongoing and important, there is currently no cure for Alzheimer's disease. However, if interventions aimed at reducing stress were prioritized in guidelines for dementia prevention, the benefits could be far-reaching, resulting in both delayed disease onset and improved quality of life for millions of people.
Yahoo
20 hours ago
- Automotive
- Yahoo
Access to credit is tightening — here's what it means for your next auto loan
Access to credit is tightening for all consumers, but particularly for consumers with subprime credit scores of 699 or lower. Both new and used vehicle prices remain high, and approvals for subprime borrowers decreased sharply in April, continuing a trend from 2024. Pre-tariff inventory is declining, and vehicles manufactured or imported with the Trump administration's new tariff policies are expected to send prices higher. Subprime borrowers may still be able to buy a car by seeking out used vehicles, exploring banks or credit unions and considering private party purchases. Auto sales from April and the first part of May saw an uptick from February and March, but they are expected to dip as existing vehicle inventory is depleted and new tariffs affect vehicles arriving on car lots. While experts agree tariffs will increase vehicle prices, no one is sure exactly when these increases will happen — largely because the auto market moves slowly. The true financial impact may not be clear for months to come. At the same time, auto loan delinquencies have been increasing. According to TransUnion, delinquencies in the fourth quarter of 2024 rose to 1.47 percent, exceeding a high set in 2009 during the Great Recession. Lenders are responding by becoming more cautious with who they extend auto loans to. Denials are increasing for those with subprime credit, and interest rates are rising for all borrowers except those with excellent credit. Unless you need a car in the near future, it may make sense to wait or consider leasing. In the meantime, you can focus on building your credit score to ensure you qualify for what is likely to be a tight market. The average credit score required for new auto loan approval has also been increasing. During the fourth quarter of 2024, lenders favored borrowers with good to excellent credit by offering lower interest rates, according to Experian's State of the Automotive Finance Market. Interest rates for subprime borrowers increased while approvals decreased, leading to a gap in affordable financing. Average interest rates by credit score New car loans Used car loans Super prime 4.77% 7.67% Prime 6.40% 9.95% Near prime 9.59% 14.46% Subprime 13.08% 19.38% Deep subprime 15.75% 21.81% Source: Experian State of the Automotive Market, Q4 2024 Rate of approval by credit score New car loans Used car loans Super prime 48.87% 22.57% Prime 36.57% 37.01% Near prime 10.88% 18.75% Subprime 5.27% 18.81% Deep subprime 0.41% 2.86% Source: Experian State of the Automotive Market, Q4 2024 David Thomas, director of content marketing at CDK Global, says that auto loan access has been 'impacted by general credit trends.' He notes that credit access — and credit denials — are at their highest points in a decade. Cox Automotive data shows this trend is continuing. April data indicates that the share of subprime borrowers decreased by 280 basis points, or 2.8 percent, year-over-year, and qualifying with poor credit may become more difficult if the cost of vehicles rises significantly. Auto loan approval rates increased by 20 basis points, or 0.2 percent, in May, according to recent data from Cox Automotive. But while approval rates increased overall, they decreased sharply for those with subprime credit. This aligns with Experian's data, which showed that the average credit score of borrowers purchasing a new vehicle has increased from 744 in 2020 to 755 in late 2024. The trend is similar for used vehicles, with the average credit score increasing from 681 to 691 over the same period. 2020 2021 2022 2023 2024 Average credit score for new car loans 744 746 750 755 755 Average credit score for used car loans 681 684 687 691 691 A number of factors could be making lenders wary of borrowers with weaker credit. Historically high car prices coupled with high interest rates have made affordability an issue for most consumers. An increasing number of those consumers have chosen longer loans to offset high prices, even though longer terms are correlated with higher delinquency rates. Now, with tariffs and inflation looming, many lenders are seeking borrowers that present less risk. A recent report from Santander Bank shows that, in the first quarter of 2025, close to half of middle-income Americans delayed purchasing a vehicle in the past year due to cost. That pent-up purchasing power was released in April and the beginning of May, when demand for vehicles increased. This demand raised the average price of new vehicles to $48,699, a 2.5 percent increase from March, according to a Kelley Blue Book report. This was a significant uptick from the typical 1.1 percent increase expected from April sales, which are often fueled by tax refunds. Bankrate's take: Many experts don't believe these numbers will last. Vehicle prices are expected to increase in the coming months as pre-tariff automotive stock dwindles and new models arrive on car lots. Meanwhile, the Manheim Used Vehicle Value Index (MUVVI), which tracks the price dealerships pay for used vehicles, increased by 2.7 percent from March to April. This indicates the price of used vehicles is increasing, which may explain why used vehicle sales dipped. With a shortage of inventory and increasing demand, it seems likely that the price of used vehicles will stay close to the price of new vehicles. To get the most value — and a manufacturer warranty — look into a certified pre-owned (CPO) car. Despite what may feel like an uphill battle, consumers shopping for a vehicle can still find ways to find car loans for bad credit and buy an affordable car. Pre-tariff 2024 and 2025 vehicles are still on lots for the time being, and buyers can time their purchases around traditional holiday car sales like Memorial Day and Labor Day. And while rates are high for those with less-than-perfect credit, exploring new financing options is a helpful way to find a good deal. 'I would say explore credit unions, look beyond just banks,' advises Sean Tucker, Lead Editor at Kelley Blue Book. Historically, credit unions have been more willing to work with borrowers with subprime credit, and typically, auto loans from credit unions offer some of the lowest interest rates. This is backed up by Cox Automotive's data, which showed that in April credit was most accessible through credit unions. Another option is a bad credit auto loan, but consumers should keep in mind that these loans often have high interest rates and more fees than other auto loans. Subprime borrowers can expect an interest rate of around 13 percent for new car loans and a whopping 19 percent for used cars. Those in the deep subprime category fare worse, and some may face an interest rate over 21 percent. For now, average car loan interest rates are likely to remain high, further exacerbating the lack of affordable options in the auto market. Tucker also advises buying a used car privately. 'Private party purchases are always cheaper than what's on the sales line.' Buying privately doesn't always require you to have cash for the car, either, since private party auto loans are available from select lenders. Still, lenders set similar eligibility requirements, so it may be difficult for a subprime shopper to qualify for a private party auto loan. As always, consumers will benefit most from paying down debt, catching up on unpaid bills and focusing on rebuilding credit. This process takes time, so while it may not be the fastest way to get behind the wheel, it is an important step to access credit at a lower interest rate in the future. By building your credit score, you may be able to qualify for more competitive rates in the future, regardless of how the auto industry shifts. The current auto market isn't great for buying for a number of reasons, particularly for those with low credit scores or no credit history. Yet there are still options for those in need of auto financing. Credit unions and private party purchases may be the right course for an affordable car payment, but it doesn't hurt to build credit and wait out the market. The auto industry plans years in advance, so a few bumpy months won't necessarily lead to a bleak, unaffordable future for vehicle financing. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
a day ago
- Business
- CNBC
Harvard-trained investor: I've repeated this 6-word mantra daily since I was 20—it helped me become more successful than most
Alexa von Tobel starts every day on a positive note — a function of the "daily mantra" the Harvard University-trained investor has repeated every day for the past two decades, she says. "I've had it, probably, since I was 20: 'Get up, dress up, show up,'" says von Tobel, 41. "[It means] get up early, get dressed and show up with a very positive attitude." A founder and managing partner of venture fund Inspired Capital, von Tobel says she typically wakes up by 6 a.m. to "get ahead" of her three children and exercise so she can be "ready to take on the day in a powerful way." That positive outlook helped give her the confidence to drop out of Harvard Business School and move to New York to launch a startup at age 24, she says. The startup was online financial advisory LearnVest, which she founded as startups struggled to access venture capital amid the start of the Great Recession. Von Tobel credits a detailed, 75-page business plan and her own unshakeable conviction for her ability to raise more than $1 million from investors within a year of launching. "There was just an absolute desert of capital and my mindset was, like, 'There's only one plan. It's plan A and we'll figure it out," she a successful business — LearnVest reached 1.5 million users before selling to Northwestern Mutual for a reported $375 million in 2015 — required "extreme trust in my ability to figure things out, [which] stems from this very positive outlook," adds von Tobel. Every entrepreneur should develop their own version of a relentlessly optimistic mindset about their business, so they can build the confidence and resilience they'll need to forge ahead while weathering inevitable setbacks, she says. "It's natural to me, [but] the mindset of, literally, 'the impossible is possible' is very important for an entrepreneur: to only look for the path to make something successful, and the sheer commitment to extremely detailed positive thinking to make [that] happen," von Tobel says. Positive thinking can provide real benefits ranging from reduced stress and better overall health to increased productivity and improved problem-solving skills, research shows. It can be especially powerful when combined with diligent preparation and a commitment to hard work — particularly important traits in the business world, according to serial entrepreneur and Stanford University adjunct professor Steve Blank. Skipping out on research and preparation is the "biggest mistake" people make that often leads to failure in business, Blank told CNBC Make It in March. Billionaire Mark Cuban touts a similar message, phrased more bluntly: "You [need to] know your s--- better than anyone else in the room," he told GQ in 2022. Some other successful entrepreneurs agree. "Positive thinking is [an] incredibly powerful tool," billionaire Richard Branson wrote in a 2018 blog post. "Simply put: positive, proactive behavior spurs positive, proactive behavior." You can boost your own positivity by avoiding constantly comparing yourself to others and working on how you judge yourself, psychologists say. Replacing self-criticism with self-compassion — everyone makes mistakes, and you can learn something from every setback — can help shift your mindset from negative to positive, according to leadership and mental strength expert Scott Mautz. "Stop all that negative inner chatter — the destructive thoughts, beliefs, and attitudes that take over..." Mautz wrote in August. "Instead, talk to yourself as you would to a friend in need, with compassion and empathy." Von Tobel is also right, according to author and financial therapist Aja Evans: Regular uplifting affirmations genuinely help, too. They can help "fortify you, so when the crisis does come, you truly believe that you can handle it," Evans said in December. ,
Yahoo
a day ago
- Business
- Yahoo
Americans aren't feeling encouraged by Trump's trade negotiations
Americans didn't feel any sense of optimism about the US economy this month, despite tensions easing somewhat in President Donald Trump's ever-evolving trade war. Consumer sentiment held steady in May compared to the prior month at a final reading of 52.2, the University of Michigan said in its latest survey released Friday. Sentiment was slightly worse earlier this month, according to a preliminary reading, which 'turned a corner in the latter half of the month following the temporary pause on some tariffs on China goods,' according to a release. May's reading matched April's for the fourth-lowest reading in consumer sentiment on records going back to 1952, lower than anything seen during the Great Recession. The chaotic rollout of Trump's tariffs has unsettled Americans in recent months, but it doesn't necessarily mean spending is bound to weaken, economists say. Still, the resilience of the US economy — including the labor market — has come into question as Wall Street, the Federal Reserve and everyday consumers continue to have a bleak outlook. 'Consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future,' Joanne Hsu, the survey's director, said in a release. The survey's index capturing people's expectations for business conditions, employment and income inched slightly higher this month from April, but it was still down a sharp 30.4% compared to the same month a year earlier. Consumers' expectations for inflation were also much more modest in May compared to prior months, with year-ahead inflation expectations seeing 'the smallest increase since the election' and marking 'the end of a four-month streak of extremely large jumps in short-run expectations,' the university said. The economy's health now largely hinges on what happens in Trump's trade war. A court this week deemed it unlawful for Trump to use emergency powers to put in place most of his sweeping tariffs, though the administration on Thursday successfully appealed to put them back into place for now. On Friday, Trump claimed that China has 'totally violated' its trade agreement with the United States, which sent stocks lower. The latest Michigan survey was conducted through May 26, so it doesn't take into account the recent court rulings and Trump lashing out at China. The constant twists and turns in Trump's trade war is making it difficult for policymakers, economists and investors to estimate with any confidence what the US economy's future might look like, since most of it depends on what happens with tariffs. That could keep interest rates elevated. Fed officials earlier this month 'agreed that uncertainty about the economic outlook had increased further,' according to minutes from their May 6-7 meeting released Wednesday. They said that persistent uncertainty, especially with Trump continuing to flip-flop on his tariff threats, means that it is 'appropriate to take a cautious approach' — holding borrowing costs steady. And several trade developments have occurred since Fed officials last convened earlier this month. 'If on the backend of this thing either we don't put the tariffs in or they reach some deals that allow us to avoid doing that, we could go back to what we were prior to April 2,' Chicago Fed President Austan Goolsbee said Thursday at a policy conference hosted by the Detroit Regional Chamber. 'If you have stable full employment and inflation going to target, rates can come down to where they would eventually settle.' For now, all eyes are on whether Americans will continue to open their wallets — or pull back in the face of swirling uncertainty. Separate data from the Commerce Department out Friday showed that consumers slowed their spending sharply in April after going on a spending spree in the prior month to get ahead of any sticker shock due to tariffs. 'It's always an encouraging sign to have better sentiment data, but what really matters is consumer spending — and there's still a segment of the population with capacity to spend because of asset prices,' Tom Bruce, macro investment strategist at Tanglewood Total Wealth Management, told CNN. 'We still have a very strong wealth effect going on throughout the economy for those who own assets.'
