Tariffs anxiety turns consumer sentiment negative

US consumer and business sentiment turned sharply negative in the past two months due to anxiety over tariffs, but key economic indicators are still suggesting that the economy remains fairly strong, according to a new quarterly report from CoBank’s Knowledge Exchange released on April 10.

The unpredictable nature of US policy, no matter the result of the current 90-day negotiating period with trade partners, will have long-term implications, analysts said.

“The question on the minds of investors, businesses and corporate boards is whether the declining expectations will soon translate into slower spending and tightening profit margins,” they said.

The answer likely will come into view by the end of June, if not sooner. Historic data suggests that declines in consumer spending begin to become apparent three to five months after a sharp decline in economic sentiment.

“Not including the brief pandemic-related recession, which was overwhelmed by massive government stimulus, the previous three US recessions in 1990, 2000 and 2007 were all forewarned by weakening sentiment that led to a steep decline in consumer spending,” said Rob Fox, director of CoBank’s Knowledge Exchange. “The next set of hard data from reports on retail sales and consumer spending should begin to provide some guidance as to which way the economy is heading.”

In the animal protein section of the report, CoBank explained how record-high prices for the beef cattle sector continue in 2025 during continued herd liquidation and delayed rebuilding.

“Despite volatility in the US cattle herd, the beef sector has been able to maintain production to meet strong consumer demand,” the bank said. “Through the third week of March, US beef production was up slightly compared to 2024.”