Harriet Torry

Consumer sentiment continues to fall in the U.S., with Americans serving up a bleak outlook on the economy. Plus, how could President Trump's pressure on Jerome Powell make the next Fed chair's job even harder?

Consumer sentiment continues to fall in the U.S., with Americans serving up a bleak outlook on the economy. Plus, how could President Trump's pressure on Jerome Powell make the next Fed chair's job even harder?

And a Milwaukee judge is arrested and charged in federal court for obstructing immigration enforcement. It's Friday, April 25th. I'm Pierre Bien-Aimé for The Wall Street Journal, filling in for Alex Osola. This is the PM edition of What's News, the top headlines and business stories that moved the world today. Consumer sentiment continues to sour among Americans.

And a Milwaukee judge is arrested and charged in federal court for obstructing immigration enforcement. It's Friday, April 25th. I'm Pierre Bien-Aimé for The Wall Street Journal, filling in for Alex Osola. This is the PM edition of What's News, the top headlines and business stories that moved the world today. Consumer sentiment continues to sour among Americans.

According to the University of Michigan's closely watched measure, U.S. households ended April feeling much worse about the economy than they did in March. Its final index out today of consumer sentiment for April was 52.2, down from 57 the prior month. Respondents said they expect prices to surge 6.5 percent over the next year, up from expectations in March for a 5 percent increase.

According to the University of Michigan's closely watched measure, U.S. households ended April feeling much worse about the economy than they did in March. Its final index out today of consumer sentiment for April was 52.2, down from 57 the prior month. Respondents said they expect prices to surge 6.5 percent over the next year, up from expectations in March for a 5 percent increase.

The survey said that was the highest reading since 1981. Wall Street Journal economics correspondent Harriet Torrey joins me now. Harriet, what is it that's driving consumer sentiment down?

The survey said that was the highest reading since 1981. Wall Street Journal economics correspondent Harriet Torrey joins me now. Harriet, what is it that's driving consumer sentiment down?

Consumers are generally feeling pretty skittish about the economy. And if you look at the various components of the index, they're worried about their jobs, they're worried about their incomes, and they expect higher inflation. So that's really a recipe for stagflation.

Consumers are generally feeling pretty skittish about the economy. And if you look at the various components of the index, they're worried about their jobs, they're worried about their incomes, and they expect higher inflation. So that's really a recipe for stagflation.

It seems like just a great deal of uncertainty about the direction of the economy is really causing people to feel pretty uncertain. So trade policy, for instance, and prices, you know, how import tariffs will impact prices. Inflation expectations are up by a lot in the short term. So year ahead inflation expectations are 6.5% this month.

It seems like just a great deal of uncertainty about the direction of the economy is really causing people to feel pretty uncertain. So trade policy, for instance, and prices, you know, how import tariffs will impact prices. Inflation expectations are up by a lot in the short term. So year ahead inflation expectations are 6.5% this month.

And that is extremely high, especially when you look at the most recent inflation data, which is only a little bit above 2%. So consumers are really expecting a big spike in prices. And over the longer term, five to 10 years, consumers are also expecting higher inflation. Not quite as high, but it was definitely up in April versus in March. And it's causing them anxiety.

And that is extremely high, especially when you look at the most recent inflation data, which is only a little bit above 2%. So consumers are really expecting a big spike in prices. And over the longer term, five to 10 years, consumers are also expecting higher inflation. Not quite as high, but it was definitely up in April versus in March. And it's causing them anxiety.

How significant are consumers' expectations to the economy?

How significant are consumers' expectations to the economy?

Well, consumer spending is what drives the US economy. But having said that, consumer sentiment doesn't always translate into consumer spending. So for instance, in 2022, we saw a very, very sharp drop in consumer sentiment. People were extremely worried about the economy and very depressed about inflation. But at the same time, they carried on spending.

Well, consumer spending is what drives the US economy. But having said that, consumer sentiment doesn't always translate into consumer spending. So for instance, in 2022, we saw a very, very sharp drop in consumer sentiment. People were extremely worried about the economy and very depressed about inflation. But at the same time, they carried on spending.

And as we saw in the survey, there is a big split along partisan lines. So in April, we saw sentiment drop among Democrats to its lowest on record, whereas among Republicans, it picked up slightly.

And as we saw in the survey, there is a big split along partisan lines. So in April, we saw sentiment drop among Democrats to its lowest on record, whereas among Republicans, it picked up slightly.