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US consumer confidence has seen a significant decline, as President Donald Trump's economic policies, including tariffs and market instability, create uncertainty for shoppers and businesses alike.

The University of Michigan's consumer sentiment index recorded an 11% drop this month, marking its third consecutive monthly decline and reaching the lowest point since November 2022.

The index fell from 64.7 to 57.9, far below economists' expectations of 63.2. This sharp decline signals growing concerns about the economy and is a troubling sign for future consumer spending.

The downturn in consumer confidence has been felt across various sectors, with a decrease in store traffic and a slowdown in discretionary spending.

According to FinancialTimes, foot traffic to US stores dropped by 4.3% in early March compared to the previous year.

Visits to major retailers like Walmart, Target, and Best Buy have also fallen, as consumers remain cautious about their spending amid rising inflation and uncertain market conditions.

Marshal Cohen, chief retail analyst at Circana, explained, "The consumer is being barraged with so many different elements. It's easier for them to step back and say, 'I'm going to ride this out and wait and see what happens.'"

This sentiment reflects the growing unease about the economy's future, as consumers struggle to keep up with rising prices and volatile financial markets.

Trump's Trade Policies Fuel Economic Uncertainty as S&P 500 Slips 10%

The Trump administration's trade policies, particularly the ongoing tariffs, have contributed to the uncertainty. Despite the administration's claims that the economy might need a "detox" period, market reactions have been swift.

The S&P 500 index recently fell into correction territory, marking a 10% drop from its previous high. Investors are particularly concerned about the back-and-forth nature of Trump's tariff decisions, which have made it difficult for businesses to plan for the future, WallStreetJournal said.

While inflation has been a concern for months, it's clear that consumers are feeling the strain. Many have already started cutting back on discretionary spending, with data showing a 3% decline in sales of general merchandise and a 2.8% drop in fast-food restaurant traffic in February.

Even major retailers like Target have reported weaker sales and warned of profit pressures, citing "tariff uncertainty" as a key factor.

The economic uncertainty has also led to a rise in inflation expectations. The University of Michigan's survey found that expectations for inflation in the next year jumped to 4.9%, the highest since late 2022.

This could further complicate the Federal Reserve's decision-making, as higher inflation expectations can lead to increased prices and wages, perpetuating a cycle of inflation.

With both consumers and businesses facing an unpredictable economic landscape, the outlook for the near future remains uncertain.

While the economy may still see growth, it is likely to be slower than initially expected. Economists have already downgraded their forecasts for US GDP growth, with JPMorgan now predicting only 1% growth in both the first and second quarters of the year.

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