Citizens of America are growing increasingly concerned about conditions because of the trade war. This spells out terrible news in context of the economy of the country in the long term. As per reports generated by the Michigan University, out of three consumers, at least one is concerned about tariffs and has severe worries about it.
In fact, it is these concerns that have caused the index of August to register its biggest monthly fall ever since the December of 2012. Further, this data also undercut the consensus forecasts. The figures came in to a tally of 89.8 points instead of the expected count of 92.1 points. This number has been generated on a certain monthly survey consisting 600 households as well as their assessment regarding the economy and financial conditions of the country.
The trade tactics from the President of the United States, Donald Trump have consisted of reversals as well as threats of the future tariffs imposed on China and other allies over several months in the past months. According to Richard Curtin, the act has been increasing uncertainty and diminishing consumer spending right on home grounds. Curtin is currently the chief economist at the Consumers Survey. Curtin also warned that trends such as this do not have the tendency of being easily reversed.
Most probably, the next set of tariffs regarding Chinese imports will come into effect the next weekend. These tariffs are expected to impact consumer goods as well. Confident consumers equipped with healthy spending form an important part of US economy. When the growth of GDP went downhill in the year’s second quarter, some drew comparisons with this year’s initial three months. A major reason why the economy stayed on its roaring course was cited as the consumers. As a result, a decrease in the discretionary spending of Americans henceforth would impact the nation’s economy badly.