When the voters returned to Donald Trump to the White House in November, many had the economy of mind. The candidate Trump promised to lower prices immediately and arranged the boom times for the market.
However, that is not the case almost two months after administration.
On the other hand, the markets turned south this week in the midst of a large amount of data that show that the economy looks more and more precarious, with federal cuts led by the Elon Musk Doge group increasing concerns about the state of the labor market and the threats of fees that add to the costs of the tired buyers of inflation.
On Thursday, the point of reference S&P 500 submerged in the correction territory, which means that it closed 10% below its most recent maximums. It was his fourth consecutive negative week, the time since a streak occurred was last summer.
The decline occurred when Trump increased its rates strategy, allowing steel and aluminum duties to enter into force, and incurred retaliation rates, while they continue to threaten with greater taxes on Canadian goods and bring new warnings of tariffs for European imports of champagne and wines.
Actions prices largely reflect expectations on future profits. And CEOs and analysts suggest that US consumers are experiencing an important reorientation of their perspective.
“I think it’s just an uncertain world at this time,” said Ed Stack, president of Dick’s Sporting Goods, CNBC this week when asked about the company’s expectation that his profits will be lower this year. “What will happen from the point of view of the tariff? You know, if tariffs are implemented and prices increase the way they could, what will happen to the consumer? “
On Friday, the University of Michigan reported that the commercial conditions of the perspective of the year fell to its lowest level. Meanwhile, future inflation and unemployment survey readings increased.
These results are part of a broader trend. The consumer expectations survey of the New York Federal Reserve, published on Monday, showed “notably” the unemployment worsening perspectives, the capacity of consumers to make minimum payments of the debt and credit access expectations, while the perspectives for one year actions fell to their lowest level since December 2023.
The National Federation of Independent Companies (NFIB), which tends to lean more conservative, reported this week that its uncertainty index rose to its second highest registered reading last month.
“The uncertainty is high and increases in Main Street, and for many reasons,” said Nfib’s chief economist Bill Dunkelberg, in a statement. “Those owners of small businesses who expect better commercial conditions in the next six months decreased and the percentage of seeing the current period as a good time to expand, but remains well above where I was in autumn. Inflation remains an important problem, occupied second place of the main problem, the quality of work. ”
A White House spokesman did not respond to a request for comments on the worsening of the perspective. But the president does not show signs of abandoning his rates strategy, while the members of his administration are now actively preparing the electorate for a possible recession.
The Secretary of Commerce, Howard Lutnick, said this week that a recession “would be worth it” to establish Trump’s economic policies in his place while adding that it would be the “driver’s economy” to the fourth quarter. The Economic Advisor of the White House, Kevin Hassett, said that the uncertainty of commercial policy would be “resolved” in early April and that the economy “would take off” in the second quarter.
The secretary of the Treasury, Scott Besent, warned that the economy needed to “detoxify” his alleged dependence on public spending, although he declared in a later interview that he did not imagine a recession.
Trump has said that the economy is in “transition.”
Others in the conservative information ecosystem are trying to paint the weakening as “achievements”, pointing out the fall in mortgage rates and daylight in consumer prices.
It is true that gasoline prices have dropped, just like egg prices, while mortgage rates are falling. However, some experts say that these developments are occurring in a context of weakening the general demand and fears of economic growth, since consumers begin to process that this is not the economy for which they were recorded.
“Many consumers cited the high level of uncertainty around politics and other economic factors; Frequent turns in economic policies make it very difficult for consumers to plan for the future, regardless of the political preferences of one, “said Joanne Hsu, director of the Survey of the University of Michigan, in a statement.
Bloomberg News reported that 48% of survey respondents spontaneously mentioned tariffs during interviews with the university, and that duties were expected to generate substantial ascending pressure for inflation in the future.
In a note for customers on Friday, the American economist of JP Morgan, Michael Feroli, reduced his estimate for the growth of the United States during the year, while forecasting unemployment would now rise up to 4.4%.
“The greatest uncertainty of commercial policy should weigh on the growth of activity, particularly for capital spending,” he said. Meanwhile, Trump tariffs have fulfilled, “create an increase with the main inflation and a drag corresponding to the power to buy the consumer,” he said.
“Last week we stopped to review our economic forecast while we expected greater clarity about commercial policy,” Feroli wrote. “In retrospect, we could end up waiting for a long time.”
