| Optimism about the economy and the prospects of lower prices that followed President Donald Trump’s election is starting to wane. A string of recent economic reports and surveys show that US consumers and businesses are increasingly pessimistic about the nation’s economic outlook — especially for jobs and inflation. The latest sign came today from the Conference Board’s monthly survey, which showed consumer confidence fell in February by the most since August 2021, and consumers expect prices will rise as a result of Trump’s threatened sweeping tariffs on imports. That followed last Friday’s University of Michigan survey showing consumer sentiment dropping and expectations for inflation over the long term rising to the highest level in almost three decades. (Notably, the Michigan survey shows a big partisan split, with negative views of Democrats and political independents driving driving down sentiment and Democrats driving up inflation expectations.) Even the mood of small businesses owners, who anticipated more business-friendly policies from Trump, has soured somewhat because of the prospect of higher costs resulting from tariffs. The president said yesterday that 25% tariffs on Canada and Mexico, expected to take effect on March 4, are “moving along very rapidly.” While global financial markets had appeared to be largely shrugging off concerns about the inflationary impact of Trump’s trade and immigration policies, signs are starting to emerge that the chaos and uncertainty at the start of Trump’s second term is starting to become a bit too much to bear. There also are some doubts in bond markets that Elon Musk’s drive to slash federal spending will make a big enough dent in the national debt. Consumer spending accounts for roughly 70% of the US economy, and Scott Baxter, chief executive officer of Kontoor Brands, which makes Lee and Wrangler jeans, sees a retreat. “The consumer right now is confused,” he said during the company’s quarterly call with analysts today. “They’re worried about work. They’re worried about the businesses that they’re in. Are those going to be impacted by some of the layoffs, the tariffs, the current situation right now?” — Mark Niquette | 
