Nazmul Ahasan

(Bloomberg) — US consumer sentiment fell to a more than two-year low and long-term inflation expectations jumped by the most since 1993, illustrating growing apprehension about the economic impact from tariffs.

The preliminary March sentiment index dropped to 57.9, the lowest level since November 2022, from 64.7 a month earlier, according to University of Michigan data issued Friday. The figure was weaker than all estimates in a Bloomberg survey of economists.

Consumers expect prices to rise at an annual rate of 3.9% over the next five to 10 years, up 0.4 percentage point from the prior month and the highest in more than three decades. They saw costs rising at an annual rate of 4.9% over the next year, up from 4.3% and the highest since 2022.

As the scope of President Donald Trump’s tariffs policy broadens, consumers across the political spectrum have become increasingly concerned that the extra duties will eventually lead to higher costs. While inflation cooled last month, any sustained pickup in price pressures risks causing households to limit discretionary purchases.

Consumers’ expectations of their finances dropped to the lowest level on record, the survey showed. Respondents said there was a 48.7% chance that the stock market will increase in the coming year, the lowest probability since May 2023.

The S&P 500 climbed after a rocky week for investors while the dollar declined.

“Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences,” Joanne Hsu, director of the survey, said in a statement.

Forty-eight percent of survey respondents spontaneously mentioned tariffs during interviews with the university.