US consumer confidence fell more than expected, inflation expectations rose, and Republican approval ratings hit their lowest point during Trump's term.

U.S. consumer confidence plummeted in early September to a recent low, pressured by both rising gasoline prices and trade tensions, which significantly deepened public concerns about the cost of living.

According to preliminary results released by the University of Michigan on Friday, the U.S. consumer confidence index fell to 47.8 in September from 51.7 in August, below all forecasts in a Bloomberg survey of economists. Consumers' expectations for inflation over the next year jumped to 4.6% from 4%, while long-term inflation expectations for 5 to 10 years also rose slightly to 3.4%.

This decline in confidence has clear triggers: gasoline prices have risen to their highest level since records began in September, and the ongoing conflict between the US and Iran continues to push up energy costs, directly eroding the real purchasing power of American households.

This survey covers responses from respondents between August 25 and September 7, a period marked by rapidly rising gasoline prices and escalating trade tensions.

Meanwhile, the US core CPI for August, released on Friday, rose 2.4% year-on-year, the lowest level in five and a half years , while the month-on-month increase of 0.3% exceeded expectations and was the largest increase in four months. Traders expect the probability of the Federal Reserve raising interest rates next week to be about 90%.

The economic outlook has fallen to its lowest level since 2022, with most consumers expecting the Federal Reserve to raise interest rates within the next year.

In this survey, the expectation index, which measures future prospects, saw a particularly sharp drop, falling from 51.5 to 45.8; while the current situation index, which reflects the current state of affairs, remained relatively stable, decreasing slightly from 51.9 to 50.9.

Consumers’ assessment of the economic situation over the next year has fallen to its lowest level since July 2022, and both current and future financial conditions have deteriorated.

It is noteworthy that for the first time since 2023, a majority of consumers expect the Federal Reserve to raise interest rates within the next year—a shift that reflects deep-seated market concerns about a resurgence of inflation.

Bipartisan confidence is declining across the board, with Republican approval ratings hitting a new low since Trump's return.

This decline in confidence has a distinctly bipartisan character. Surveys show a drop in consumer confidence from both parties, with only 35% of Republican respondents believing the government has performed well in managing the economy—the lowest reading since Trump returned to the White House last year.

Joanne Hsu, director of the investigation at the University of Michigan, said in a statement:

"Public approval ratings for the government's economic policies declined by about 10% this month, remaining well below levels expected in February 2026, before the outbreak of the conflict with Iran. Notably, even Republicans, who typically support the current administration's economic policies, have seen a significant drop in approval ratings."

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