Consumer concerns grow as tariffs continue

Experts warn economic impacts could worsen as consumer sentiment declines

LEXINGTON, Ky. (ABC 36 NEWS NOW) — A new report is highlighting growing concerns among consumers as tariff threats continue, with experts warning of potential widespread economic impacts.

The University of Michigan’s latest report shows a 10% decrease in the Index of Consumer Sentiment, signaling increasing worries about rising costs, particularly at the grocery store, as U.S. tariffs persist.

“Tariffs on Mexican products are going to impact our fruits and vegetables, our tequila, our beer, and things that we buy daily that we don’t have in great supply in a warehouse, so the tariffs impact will be almost immediately,” said Bill Dendy, a Certified Financial Planner CPA.

Economists also point to Canadian tariffs on steel and aluminum, which they say could lead to higher costs for durable goods. Inflation remains a significant concern among shoppers. The University of Michigan report found that consumer expectations of inflation rose to 3.9%, marking the largest monthly increase since 1993.

However, economists note that last month’s inflation figures were better than expected.

“Inflation which has already been a challenge for a lot of consumers, many consumers think it’s going to continue on. Even though the inflationary numbers last month were better than anticipated, this round of tariffs could reignite the inflation, and certainly reignite the inflation fears in the consumers mind,” Dendy said.

As more shoppers express concerns about inflation and grocery prices, experts warn that economic effects could escalate if consumers begin cutting back on spending.

“As a consumer starts cutting back that means the rest of the economy doesn’t do as well. And if the rest of economy doesn’t do as well it means companies start doing things like layoffs and this domino effect could lead us into a recession and that’s the concern a lot of economists have expressed over the last week or so,” Dendy explained.

Some economists predict that the economy could recover quickly if tariffs are removed.