Escalating tariff apprehensions curb consumption intentions as per Morgan Stanley's American Consumer Sentiment Survey
Informal Take:
Following the latest Morgan Stanley's U.S. Consumer Pulse Survey, it seems Americans are fretting over tariffs and their potential effects on the economy. Seems like spending plans are dwindling, and our optimistic outlook is taking a hit due to these concerns.
Picture this survey as Morgan Stanley's giant megaphone, directed at about 2,000 folks across the nation. TheMaligned tariffs, it appears, are the main culprits causing our worries to soar. In addition to the economic concerns, inflation and market volatility are also causing a stir among investors.
Taking a closer look at the retail scene, online electronics prices have jacked up 3-4% post-tariff hikes, with Amazon sales in the affected sectors dipping about 5%. Some sellers have bumped up their prices and stalled listings, while others are holding onto their profits by using up pre-tariff inventory.
The investor world isn't having a grand old time, either. Inflation and tariffs remain the top worries (41% and 35% respectively) followed by market volatility (24%). In light of these uncertainties, over half of investors are feeling bearish, with bearish sentiment rising by 9 points from the previous quarter. Despite the pessimism, only a third of investors plan to make adjustments to their portfolios, while the rest are staying put or even gravitating towards cash. However, optimism about Fed rate cuts is on the decline, with less than half of investors believing the U.S. economy is healthy enough for rate cuts.
Here's a quick summary:
- Consumer spending plans declining
- Rising concerns about tariffs among consumers
- Inflation and tariffs remain investor worries (41% and 35% respectively)
- Over 50% of investors feel bearish
- Optimism about Fed rate cuts on the decline
- Only a third of investors plan to adjust portfolios
So, it's safe to say that we're treading cautiously as the tariff worries ripple out, causing ripples in both consumer and investor confidence. But, hey, they say every cloud has a silver lining. Fingers crossed we find ours soon!
Business confidence is dwindling as consumer spending plans decline due to growing concerns about tariffs, with nearly half of investors feeling bearish about the economy. In the financial sector, inflation and tariffs remain top concerns for investors, potentially impacting corporate finance decisions.
