US consumer confidence drops to 12 year low, tariff shock triggers panic, shopping surges
According to data from the Conference Board, consumer confidence in the direction of the economy fell to a 12 year low last week. The latest data released by the University of Michigan last Friday also showed a deterioration in overall confidence, down 12% from February, marking the third consecutive month of decline.
Although Americans are worried about the economy, they seem to be increasing their spending. About one fifth of Americans shop out of fear of future price increases, which some experts call "unlucky consumption".
Misfortune consumption refers to impulsive consumption primarily driven by fear of the future. In some cases, this is a retail therapy, but it can also be a strategy that anticipates economic uncertainty.
Wendy De La Rosa, a professor at the Wharton School who studies consumer behavior, said, "There are many reasons why people are worried. As humans, we dislike uncertainty and volatility. Therefore, when there is an impact on which country to impose what tariffs on and how it will affect our domestic industries at the national level, it really makes people nervous
Last month, consumer spending was lower than expected, but overall sales continued to steadily increase amid growing concerns about economic slowdown and inflation.
Not only consumers are concerned. Wal Mart, Delta, American Airlines and other large companies, as well as the Federal Reserve and Wall Street, are sending uncertain signals. The S&P 500 index fell 10% from its historical high in February, indicating investors' concerns about an economic slowdown.
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