Latest news with #JoanneHsu
Yahoo
30-05-2025
- Business
- Yahoo
Consumer Sentiment Held Steady in May As Tariff Uncertainty Persists
The Michigan Consumer Sentiment Index improved from its mid-May preliminary reading to 52.2, matching April's results. Inflation expectations moved lower as consumers factored in President Donald Trump's move to reduce tariffs on China temporarily. While consumers felt better about the short-term economic outlook, they were more worried about wages and remained pessimistic about long-term economic freefall in sentiment leveled off in May as consumers worried less about price increases from tariffs, but still felt uneasy about the economic outlook. The final Michigan Consumer Sentiment Index for May improved slightly from the preliminary results released two weeks ago to 52.2, matching the final results from April. The reading ends four straight months of declines for the closely watched consumer survey. The improved sentiment reflected President Donald Trump's move on May 12 to temporarily reduce tariffs on China to 30% from 145%. It shadows a similar improvement in the Conference Board's Consumer Confidence report, which rose by more than 12 points in May on the temporary tariff truce. Consumers also felt a little better about inflation at the end of the month, with year-ahead expectations for price increases coming in at 6.6%, lower than the preliminary reading but higher than April's inflation expectations. Long-term inflation expectations ticked lower in the report. 'In the second half of the month, sentiment lifted and inflation expectations eased in the wake of the May 12 pause on some tariffs on goods from China,' said Joanne Hsu, director of the University of Michigan Survey of Consumers. 'With continued policy uncertainty, however, consumers continue to expect an economic slowdown to come.' Uncertainty has spread since consumers were asked about their outlook. Courts have gotten involved in tariffs, and Trump has called the tariff pause on Chinese goods into question. While expected short-term business conditions improved, likely from the pause in tariffs, they were offset by declines in consumers' current personal finances that stemmed from stagnant wages, the report said. About 64% of consumers said they expect business conditions to worsen in the year ahead, the same as last month, but more than double the 29% who expressed similar concerns six months ago. 'Consumers still expect the economy to weaken and foresee weaker business conditions and income growth as they express ongoing frustration with the cost of living,' said Oren Klachkin, financial market economist for Nationwide. 'However, the survey suggests consumer attitudes may improve if trade deals are announced and tariff uncertainty diminishes.' The report continued to show the separation between 'hard' and 'soft' data as economic indicators like retail sales remained strong despite consumers raising worries about the economy. 'While the soft data continue to cast an unfavorable light, the hard data paint a comparatively better picture,' Klachkin said. 'Developments on the tariff front will likely continue to shape consumer attitudes.' Read the original article on Investopedia Sign in to access your portfolio
Yahoo
22-05-2025
- Business
- Yahoo
Fox Valley residents show concerns over the local economy over the next year
Consumers in the Fox Valley weighed in on the local economic outlook recently, with nearly three-quarters expecting local economic conditions to worsen in the year ahead. The Appleton Post-Crescent surveyed readers to capture the consumer sentiment in the Fox Valley in mid-April. Forty-seven respondents completed the questionnaire, responding on local economic conditions to personal finances between April 17 and April 30, amid far-reaching trade policy changes with national implications. Their responses show a deep concern about rising prices of goods and services, a tight job market, and restrained household spending. Some respondents said local issues, like egg prices, the housing market, and layoffs, and federal economic policies, especially tariffs, are shaping their recent financial outlook. This fits national trends of a prevailing economic uncertainty across the country, as shown by the recent data from the University of Michigan's Consumer Sentiment Index, which collects data monthly on consumers' views about their personal finances, business conditions, and purchasing decisions across the country. The index of consumer sentiment dropped to 50.8 out of 100, down from 52.2 in April, in a preliminary reading for May. It marks the second-lowest level on the record since June 2022. "Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers' thinking about the economy," said Joanne Hsu, director of the Surveys of Consumers, in the release. Despite this gloom, most respondents in the Fox Valley say they are prepared for a financial emergency, demonstrating resilience in the region. Here is a breakdown of what the Fox Valley respondents said: Most respondents rate the current local economy as 'good' (51%) or 'fair' (27.7%), while only 4.3% say the economic outlook is 'excellent' and 17% call it 'poor.' However, 72.3% of respondents expect the local economy to deteriorate over the next year, and only 23.4% expect improvement. It shows strong pessimism about the near future, even among those who view the current situation positively. The majority of respondents say there are 'plentiful' or 'adequate' job opportunities in the Fox Valley, but over a quarter (27.7%) see them as 'limited' and 6.4% as 'very few'. Respondents feel the labor market will be in decline. Only 19.2% expect more job opportunities in the next six months, and an equal share of 19.2% see the 'same level', while 62% expect fewer opportunities. Only 12.8% of respondents say it's a good time for a major purchase, including a home, car, or appliances, while a majority of 61.7% say 'no,' and a quarter are unsure. Just over 46% of respondents plan to decrease spending in the next six months and 27.7% will keep the spending at the same level, with another 27.7% saying they are expecting an increase. The majority of respondents fear inflation: 78.7% expect prices to increase, with 53.2% saying 'significantly' and 25.5% saying 'moderately.' By contrast, 14.9% see prices falling. Meanwhile, 59.6% of respondents are 'very concerned' about inflation and believe it impacts their purchasing decisions, while 8.5% are 'not at all' concerned. Just over 6% of respondents say their ability to save has improved over the past year, while 38.3% responded it has declined over the same time, and 55.3% say it's unchanged. Despite challenges, 70.2% say they could handle an unexpected $1,000 expense, while 19.1% say they could not, and 10.6% are unsure. Zhen Wang is a business reporter for The Post-Crescent. Reach her with story tips and feedback at zwang@ or 920-993-7117. This article originally appeared on Appleton Post-Crescent: Fox Valley survey shows economic concerns amid financial resilience
CNBC
20-05-2025
- Business
- CNBC
Survey of Consumers Director Joanne Hsu on tariffs and consumer uncertainty
Survey of Consumers Director Joanne Hsu talks tariffs and consumer uncertainty at the 2025 CNBC CEO Council Summit.
Axios
19-05-2025
- Business
- Axios
Why the consumer sentiment plunge is different now
The economy kept chugging along the last time consumer sentiment hit rock-bottom levels. But some economists worry that resilience isn't going to hold this time around, as Americans signal worries about their income and the labor market in ways not seen in 2022. Why it matters: The early 2020s inflation shock broke the tenuous link between sour sentiment and the economy. But the indicators pushing sentiment indices now are different, and in some respects, more grim. What's new: Preliminary data shows consumer sentiment hit the second-lowest level on record this month, according to the University of Michigan. The consumer sentiment index fell to 50.8 in early May, a low second only to June 2022, when the index hit 50 (and inflation peaked at 9%). By the numbers: About two-thirds of consumers surveyed by the university say they anticipate unemployment to rise over the next 12 months, the largest share since 2009. It marked the fifth straight monthly increase, bringing the share to more than double in November. Consumer views of the labor market didn't deteriorate nearly as much in recent years. On average, roughly 32% of consumers said the same each month in 2022, not drastically higher than the 2019 figure of 27%. The intrigue: The richest Americans — who drive aggregate spending in the U.S. — typically feel better about the economy than lower-income groups. But not anymore. Expectations have converged, with all income groups anticipating worse economic conditions, according to the University of Michigan, a warning for the health of consumer spending that was missing in 2022. "We're still seeing huge declines across income but most notably at the top of the income distribution," Joanne Hsu, head researcher of the University of Michigan survey, tells Axios in an email. Between the lines: Higher prices weighed on sentiment in the past few years, though consumers were not calling out a specific policy as the root cause. This time around, respondents point specifically to tariffs as potentially inflationary and economically damaging. Nearly 75% spontaneously mentioned tariffs in May, up from 60% of respondents in April. Inflation expectations are running well above those seen in 2022, when inflation was actually high. Year-ahead inflation expectations surged to 7.3% in early May, up almost a full point, to the highest level since 1981. What they're saying:"It's becoming more clear from the open ended comments it's not just about the magnitude about the tariff rates," Hsu says. "Consumers are specifically concerned about instability, unpredictability, uncertainty around trade policy, and they broadly believe that uncertainty will generate upward pressure on inflation." The big picture: The survey suggests consumers expect a large shock to their personal finances, with many reporting weakening incomes. Their assessments of their personal finances fell 10 points in early May to the lowest since 2009, while the outlook on their finances dropped to the lowest on record. The other side: A study by the Kansas City Fed released Friday found the recent sentiment slump did not "meaningfully alter" its predictions of 2025 spending growth, noting the modest tie between how consumers feel and what they do. Others agree. "I think going back a number of years the link between sentiment data and consumer spending has been weak," Fed chair Jerome Powell said earlier this month. "On the other hand, we haven't had a move of this speed and size," he added. The bottom line: There are few signs of mass private-sector layoffs, while the government data shows inflation is cooling. Consumers expect gloom anyway. To say that would have been accurate at any point in the past few years. The tariffs will test whether the sentiment-economic disconnect is a one-time phenomenon or the new normal. The final sentiment data out later this month will reveal whether "the pause on some China tariffs leads consumers to update their expectations," the university said.
Yahoo
17-05-2025
- Business
- Yahoo
There's a big disconnect between US economic vibes and what the data actually says
There's a gap between how Americans feel about the economy and what's actually going on. "Hard data" shows that the economy is holding up, despite weak sentiment. Vibes in the stock market are also looking positive, suggesting another strong year for equities. The US economy is holding up, but Americans don't seem to see it that way. The off-kilter vibes reflect a widening gap between "hard data" and "soft data" related to the economy. Simply put, forward-looking data like consumer sentiment is way down, while the backward-looking data the Fed uses to inform policy, such as employment data, is still strong. The dynamic continued to play out this week. The latest consumer sentiment reading on Friday showed an unexpected drop this month. According to the University of Michigan, the preliminary index reading fell from 52.2 to 50.8. That's the second-lowest sentiment reading the index has ever recorded. But it comes against a backdrop of upbeat developments, including cooler inflation data, an easing of US-China trade tensions, and a rally in stocks that erased year-to-date losses. "Consumers do not hold the belief that just because the most recent CPI print was not too high for the month of April, that will continue to be the case for the rest of the year," Joanne Hsu, the director of the University of Michigan's consumer surveys, told Business Insider. "Consumers are waiting for the other shoe to drop." The outlook among business leaders has also weakened. The CEO Confidence Index, which measures how corporate leaders are feeling about business conditions over the next 12 months, dropped in April compared with levels at the start of the year. The sour feelings about the economy don't square with the hard data. Inflation was unexpectedly cool during April. The consumer price index rose 2.3% for the month, down from last month's 2.4% increase. That reflects the lowest pace of inflation since 2021, according to the Labor Department. Producer prices were also cooler in the month. This embedded content is not available in your region. The job market, meanwhile, is holding up. Jobless claims were steady this week at about 229,000. The unemployment rate, while higher compared with levels at the start of the year, is near a historical low of 4.2%. This embedded content is not available in your region. Bank of America found in an analysis this week that the gap between the soft and hard data was the widest on record. Opposite Main Street, good vibes on Wall Street are propelling a strong rally this week. The S&P 500 was on track Friday to notch its fifth-straight winning session, with the benchmark index up 5% for the week on optimism around trade negotiations between the US and China. This embedded content is not available in your region. Bank of America analysts said in a note this week that "panic" in the soft economic data could actually be good news for stocks as long as the US avoids a recession. Over the past 70 years, when soft data measures weakened without a recession, US stocks rose an average of 17% over the next 12 months. The bank does not expect the economy to enter a downturn this year, partly because of strength in hard economic data, such as low jobless claims and higher wage growth relative to inflation. "Unless the hard data cracks, we suggest investors take advantage of relative value trades in each asset class. We remain bullish equities and credit, cautious on government bonds, and opportunistic on commodities," analysts wrote in a note on Friday. Other banks have also turned more bullish on stocks on the back of positive economic data and optimism around a US-China trade deal. Goldman Sachs lifted its stock forecast for the year and lowered its projected risk of a recession to 35%, down from 45%. Barclays, which initially anticipated a mild downturn in the second half, said it was removing a recession from its base-case forecast. Read the original article on Business Insider
