Consumer Inflation Expectations Surge Due To Tariff Fears: 'Unusually Large'

The expectations for inflation increase this year jumped from 3.3% to 4.3%

Cash Register — A worker sorts the money in the cash register in Miami, Florida. Joe Raedle/Getty Images

President Donald Trump's tariffs are worrying consumers who now expect much higher inflation this year.

Year-ahead inflation expectations jumped up from 3.3% in January to 4.3% in the monthly University of Michigan Consumer Survey that was released Friday morning.

The inflation reading is the highest since November 2023 and is the second consecutive month of unusually large increases.

Surveys of Consumers Director Joanne Hsu noted that it was only the fifth time in 14 years that inflation expectations jumped a full percentage point in a monthly survey.

Consumer sentiment fell for the second straight month. It is at its lowest reading since July 2024.

The decrease was pervasive, with Republicans, Independents, and Democrats all posting sentiment declines from January, along with consumers across age and wealth groups, according to the survey.

The inflation worries come after Trump imposed new 10% tariffs on imports from China. He also threatened 25% tariffs on Mexico and Canada but paused them for 30 days.

The inflation report came the same day the federal government reported more job growth and steady unemployment.

Bond yields, which are tied to mortgage rates, jumped on Friday after the reports were issued.