Consumer sentiment in the U.S. regarding the broader economy and personal finances has weakened, though worries over tariffs have eased somewhat, according to a Morgan Stanley survey.
The study, which polled around 2,000 Americans between August 28 and September 1, showed that 49% of respondents expect the U.S. economy to deteriorate, slightly lower than 50% a month earlier but up from 36% in January. About a third of participants believe the economy will improve over the next six months.
This produces a net figure — the percentage expecting improvement minus those anticipating a decline — of negative 16%, compared with negative 17% in the previous survey.
A similar trend appeared in household financial outlooks, with a net score of 6%, down from 10% last month and 23% in January.
Morgan Stanley analysts noted that U.S. consumers appear “feeling stretched,” even as many remain willing to pay more for products that deliver greater convenience.
They added, “Consumers are still willing to pay a premium for products/services that offer a substantial degree of convenience,” though the premium has fallen 40 basis points from a year ago to 4.6%.
At the same time, concerns about the impact of aggressive U.S. import tariffs remain “elevated,” but are below the levels seen after President Donald Trump announced sweeping “reciprocal” levies in early April.
The analysts pointed out that inflation remains the primary worry for Americans across income levels. “Low-income consumers are generally more worried about their ability to pay their rent/mortgage and debts, while upper income consumers over index on concerns about their investments,” they said.
The survey follows a separate report from the University of Michigan showing softening consumer sentiment in August amid concerns over potential price increases driven by tariffs.
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