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Customers push shopping carts while entering a Costco Wholesale store in Miami, Florida.
Consumer sentiment dropped to its lowest level since before the U.S. presidential election in 2016 amid growing concerns over U.S. economic growth, according to data released Friday.
The University of Michigan consumer sentiment index fell to 90.7 this month — its lowest since October 2016 — from 98.3 in December, preliminary data showed. Economists polled by Refinitiv expected the index to fall to 96.4.
“The loss was due to a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies,” said Richard Curtin, chief economist for the Surveys of Consumers. “Aside from the direct economic impact from these various issues on the economy, the indirect effect meant that half of all consumers believed that these events would have a negative impact on Trump’s ability to focus on economic growth.”
Curtin also said the survey showed the year-ahead economic outlook was the worst since mid-2014.
Worries of an economic slowdown, fears of tighter monetary policy from the Federal Reserve, and an ongoing trade war between China and the U.S. all contributed to a recent spike in market volatility. The S&P 500 fell sharply last month, briefly dipping into bear-market territory, before a rip-roaring rally.
Curtin added, however, that “while the January falloff in optimism is certainly consistent with a slowdown in the pace of growth, it does not yet indicate the start of a sustained downturn in economic activity.”