Morgan Stanley Survey: Rising Tariff Concerns, Declining Consumer Spending and Confidence — Evening Brief – 05.09.25
Morgan Stanley’s U.S. Consumer Pulse Survey highlights growing unease among American consumers about tariffs, accompanied by reduced spending intentions and a dimmer economic outlook. The 64th survey, conducted April 24–28, 2025, polled approximately 2,000 U.S. consumers to assess behavior, led by Michelle M. Weaver, U.S. thematic and equity strategist at Morgan Stanley.
Tariff concerns have surged since recent policy announcements, with 43% of consumers “very concerned,” up from 36% in the prior survey and 28% in January. An additional 23% reported moderate concern, with consistent worry across demographics but a stark political divide—71% of liberals versus 24% of conservatives are very concerned.
In response to potential tariff-driven price hikes, 42% of consumers plan to reduce spending, up from 35% last month, while only 19% intend to increase spending. Dining out was the top category targeted for cuts, cited by 18% as their primary reduction and ranked among the top three by 39%, followed by discretionary spending on travel, apparel, and electronics.
Top concerns by income group (AlphaWise, Morgan Stanley Research)
Monthly spending plans have weakened significantly, with 27% expecting to spend more and 22% anticipating less, yielding a net score of +5%. This is well below the +16% average since the survey’s inception in 2020 and reflects declines across all income groups.
Consumer confidence in the U.S. economy has further eroded, with only 34% expecting improvement in the next six months, down from 37% last month and 44% in January. With 51% predicting a worsening economy, the net confidence score dropped to -17%, compared to -13% previously and +8% in January.
Beyond tariffs, inflation remains the top concern, cited by 62% of respondents, followed by the U.S. political environment (42%) and job loss fears for self or family (31%).
Arunima Sinha, a macroeconomist on Morgan Stanley’s Global and U.S. Economics teams, predicts a slowdown in consumer spending growth. She views tariffs as a consumption tax, likely pushing real household spending growth close to zero by late 2025 and potentially stalling by early 2026 amid persistent economic uncertainty.