American consumer sentiment is plunging, consumers expect inflation to surge, and the US sharemarket is tanking. All this is occurring before this week’s “Liberation Day” when President Donald Trump will reveal his “reciprocal” tariffs.

The US sharemarket fell 2 per cent on Friday – it’s down more than 9 per cent since Trump announced his plan for reciprocal tariffs in the middle of last month – with the tech-heavy Nasdaq market down 2.7 per cent and the “Magnificent Seven” mega-tech stocks down 3.5 per cent.

Wall Street appears jittery on the outlook for the economy in Trump’s second term. Credit: Getty Images

The already jittery market’s end-of-week sell-off on Friday was a response to hotter-than-anticipated inflation data and a University of Michigan survey which showed a 12 per cent fall in the index of consumer sentiment in March to its lowest level since 2022, and an 18 per cent fall in expectations of the economy’s future.

Those surveyed expected inflation to reach 5 per cent over the next year and be more than 4 per cent over the next five years. Two-thirds of them expect unemployment to rise over the next 12 months.

A survey of US businesses by the Conference Board, a business membership group and think tank, this week showed that the index reflecting their short-term expectations for income, business and labour market conditions fell 9.6 points from February to 65.2 – the worst result since 2013. A reading below 80 has historically signalled an impending recession.

Most US business economists have been revising down their expectations of US economic growth this year from an original consensus of GDP growth of about 2 per cent. Some........

© The Sydney Morning Herald