Consumer Sentiment Drops as American Households Continue to Bear the Brunt of Trump’s Working Families Price Hike

Consumer sentiment for September fell for the second straight month, as consumers’ financial expectations and labor market outlooks deteriorated. Today’s report, coupled with the latest inflation data on consumer prices, reaffirms – once again – what American families know all too well: the Trump economy is inflicting inescapable financial pain on households across the nation. Lower and middle-income consumers saw the biggest downturn in economic views, further evidence that Trump’s economy is working for the wealthy, not for the middle class.

Alex Jacquez, Chief of Policy and Advocacy at Groundwork Collaborative, shared his reaction:

“With each data release it becomes more obvious that Trump neither had a plan, nor a concept of one, to make life more affordable for working families. Inflation is rising, prices continue to surge on everyday household items – like groceries and apparel – and the job market is frozen while Trump and Republicans reward the wealthy with tax breaks. American families are the ones who deserve a break from this chaos. Instead, they are feeling the squeeze from Trump’s harmful tax and tariff policies.”

This week in the Trump Slump, new polling and economic indicators continue to show that President Trump’s actions are deeply unpopular, hurting the economy, and harming America’s workers.

Polling and Economic Indicators on Trump’s Handling of the Economy:

• New polling from NBC News Decision Desk shows that while 45% of U.S. adults say inflation and the rising cost of living is the economic matter most important to them and their family right now only 39% approve of Trump’s handling of inflation.
• Consumer sentiment fell for the second straight month, below expectations, to 55.4. Nearly every component of the index fell, with consumers souring on their outlook for the labor market, their personal financial situation, and long-run inflation.
• Yesterday’s Consumer Price Index (CPI) revealed that prices are still climbing, especially for essentials. Inflation ticked up again in August, with the CPI rising 2.9% over the past year – up from 2.7% in July – and 0.4% just last month. Core CPI, which excludes food and energy, rose 0.3% in August and 3.1% year-over-year.
  • Everyday items saw some of the steepest increases: apples (+3.5%), tomatoes (+4.5%), fresh vegetables (+3%), and coffee (+4.1%). Clothing and household goods climbed too, with women’s outerwear up 4.4%, children’s footwear up 1.5%, toddler apparel up 1%, and TVs up 2.5%. For families, that means higher bills on the basics they simply can’t go without.
• The Labor Department also reported 263,000 new unemployment claims last week, the highest level since October 2021 – another warning sign for working families. According to the Federal Reserve Bank of New York, Americans owe more debt than at any point in history — more than $18.5 trillion in total.
• According to the Bureau of Labor Statistics, consumers experienced price pressures in transportation, with airline fares up 5.9% and motor fuel up 1.8% from last month, and new and used cars and auto repairs seeing increases.

Additional Economic Indicators:

• According to the U.S. Census Bureau, the gender pay gap continues to widen with the female-to-male earnings ratio for full-time, year-round workers in 2024 fell to 80.9 percent from 82.7 percent in 2023. This is the second consecutive annual decrease in the female-to-male earnings ratio. The slippage underscores that gender pay gaps remain persistent and could worsen under policies that weaken worker protections and bargaining power.
• American Community Survey (ACS) data show health coverage gaps widened in 2024, hitting Black and Latino communities and low-income families hardest. The uninsured rate rose 0.4 points for Black and Latino people, 0.2 for white people, and barely changed for Asian people. Among those below 138% of the poverty line, it climbed from 13.3% to 14.0%. These gaps are poised to deepen further given looming cuts to Medicaid and the scheduled expiration of Affordable Care Act premium tax credits at the end of the year—unless Republicans reverse course on these dangerous policy choices

Expert Commentary:

• Gargi Chaudhuri, chief investment and portfolio strategist for the Americas at BlackRock, explained grocery prices are on the rise according to the latest CPI data, “Fruits and vegetables, which climbed the most since January 2020, and meats, poultry, fish, and eggs were the food products where prices rose the most. Many of these food products were affected by tariffs as the U.S. is a net food importer.”
• Patrick Riordan, head roaster at Palace Coffee, responded to the effects of the tariffs: “The worst part about tariffs is that the farmers, producers, our importing partners, even our baristas, like no one is seeing the benefits of these costs rising. It’s directly just a tax… It almost kind of feels like we’re lighting money on fire.”

• Heather Long, the chief economist at Navy Federal Credit Union, reacted to the latest inflation data: “The middle-class squeeze from tariffs is here. Inflation hit 2.9% in August, the highest since January and up from 2.3% in April. It’s troubling that so many basic necessities are rising in price again: Food, gas, clothing, and shelter all had big cost jumps in August. And this is only the beginning.”
• Lindsay Owens, Executive Director of Groundwork Collaborative, issued a statement about Groundwork Collaborative and Protect Borrowers’ new poll conducted by Data for Progress exposing the ways Americans depend on debt and credit to stay afloat: “Today’s poll reveals a troubling rise in families relying on buy now, pay later loans just to stay afloat, trapping hardworking Americans in a cycle of debt that some fear will take years to climb out of. As Americans plead for their government to help with soaring costs, President Trump is not just ignoring their struggles, he’s actively making them worse with reckless policies that drive up prices on essentials like food and energy.”
• Alex Jacquez, Chief of Policy and Advocacy at the Groundwork Collaborative, shared his reaction on persistent inflation and the weakening labor market as a result of President Trump’s economic agenda: “Make no mistake, inflation is accelerating and American families continue to feel price pressures across the board from children’s clothing, to groceries, to autos. Rate cuts will not ease the inescapable financial pain that the Trump economy is inflicting on households across the nation.”