LANSING — American consumer sentiment remains near modern-time lows, but is showing improvement as the country adapts to some of President Trump’s policy changes on tariffs and the economy, according to a researcher from the University of Michigan.
Local businesses also say they’re feeling the impact of that sentiment as visitors pull back on optional spending over the normally booming summer season.
“Consumers are expecting a resurgence of inflation and an economic slowdown, and they don’t really have the strength and income expectations to support strong spending through that,” said Joanne Hsu, a researcher at U-M’s Institute for Social Research.
Hsu testified before the state Senate Oversight Committee Wednesday, saying consumer sentiment continues remains negative but has begun to improve.
“Sentiment has plunged over the course of 2025, largely attributable to the start of tariff policy uncertainty and the volatility around trade policy,” she said.
Hsu says that multiple months of positive consumer sentiment in late 2024 were reversed when Trump took office.
Recent date shows that consumer sentiment was steady in May and has increased over June so far, which Hsu attributes to the calming of some tariff policies.
But plenty of concerns remain among the general public.
“Not only are they worried about the aggregate labor market, they are worried that they themselves will be impacted,” she said, referring to consumers. “And if that’s the case, they are unlikely to continue spending in the robust way needed for economic continued robust economic growth.”
Karen Roofe, owner of My Secret Stash and two other stores in Traverse City, says that she’s seeing the first-hand impact of reduced consumer spending.
“Visitors are still coming — it’s Traverse City, they’re going to come,” she said. “But they’re spending more cautiously. They’re booking shorter stays. They’re dining out less and being more selective with their purchases.”
Roofe, who is also the vice president of the Downtown Traverse City Merchant Association, says that most of her products aren’t affected by tariffs directly — but more hesitation among consumers still has left its mark on her business.
“At My Secret Stash, our average transaction values and our foot traffic have dropped, and it makes a precarious situation,” she said.
Roofe says that other small businesses are likely struggling with the change in spending habits — combined with the usual demands of running a business, Roofe says it’s been a tiring start to the season.
“Lately it feels like all I do is react,” she said. “The economic instability, fluctuating costs and changing consumer behavior have created a level of stress that’s really hard to describe.”