Due to concerns about Trump's policies, final data from the University of Michigan's February Survey of Consumers showed that consumers' expectations for long-term inflation over the next 5-10 years were revised upwards to 3.5%, marking the highest level since April 1995.
More than half of American consumers surveyed expect the unemployment rate to rise in the next year, also the highest level since 2020. On the same day, the S&P Global U.S. Composite PMI, which tracks business activity in the services and manufacturing sectors, fell to 50.4 in February, its lowest level in nearly 17 months.
The core factor triggering the sudden change in expectations is Trump's return to the White House. The report specifically pointed out that there is currently great uncertainty surrounding long-term inflation expectations in the US, especially "considering the policy changes of the new administration."
Facing Trump's use of tariffs and the potential impact on American consumers, Federal Reserve officials have reiterated that they will not rush to cut interest rates amid lagging progress in reducing inflation.
From an economic perspective, higher inflation expectations can lead to changes in consumer behavior, ultimately driving actual inflation upwards.
Joanne Hsu, an economist at the University of Michigan and director of the Surveys of Consumers, interpreted that higher inflation expectations could come true if consumers continue to increase spending to avoid anticipated sharp price increases.
It is worth noting that US economic data, including the consumer survey, is now reflecting a severe partisan divide—whether the forecast figures are high or low depends entirely on whether the respondents are Trump supporters.
For example, in the survey on inflation expectations for the next year, Democrats' expectations reached 5.1%, political independents expected 3.7%, while Republicans expected 0%. Similar divisions exist among Americans' expectations for the next 5-10 years, with Democrats expecting 4.2% and Republicans expecting only 1.5%.