Grocery Store Shopping Supermarket (Oscar Wong/Getty Images)
(NEW YORK) — Consumer sentiment ticked higher in February for the second consecutive month as inflation fears appeared to ease, though shopper attitudes remained well below levels registered a year ago, University of Michigan data on Friday showed. The reading exceeded economists’ expectations
At its low point in November, consumer sentiment fell close to its worst level since a pandemic-era bout of acute inflation. Modest gains in recent months indicate some positive momentum for shoppers.
Year-ahead inflation expectations dropped from 4% in January to 3.5% in February, the data showed. The outcome anticipated by respondents would put inflation above its current level of 2.7%.
The labor market has slowed in recent months, while inflation has hovered above the Federal Reserve’s target rate of 2%.
Despite these challenges, some major economic indicators remain upbeat.
In the fall, shoppers helped propel the fastest quarterly U.S. economic growth in two years, federal government data in December showed.
Meanwhile, a relatively small fraction of American adults are unemployed and looking for work. The unemployment rate dropped to 4.4% in December from 4.6% in November, the U.S. Bureau of Labor Statistics said, putting unemployment at a low level by historical standards.
Turmoil in markets this week, however, has prompted concern among some observers about the financial outlook.
Some major tech stocks plummeted in recent days after Anthropic unveiled an artificial intelligence tool viewed by some investors as a potential replacement for widely-used software products.
The price of bitcoin plunged more than 10% on Thursday, sinking the world’s largest cryptocurrency to its lowest level since October 2024 and erasing sizable gains made since then.
Geopolitical conflict also looms amid negotiations over Greenland, U.S.-backed leadership in Venezuela, the ongoing war between Russia and Ukraine, as well as persistent tensions between the U.S. and Iran.
In recent weeks, Trump has threatened tariffs against Canada, South Korea and eight European countries, invoking the tool as means of exerting pressure over a range of foreign-policy issues.
US President Donald Trump speaks during a press conference at the White House, Washington, D.C., US on February 20, 2026. Kyle Mazza/Anadolu via Getty Images
(NEW YORK) — President Donald Trump rushed to enact new tariffs and vowed to preserve others after a recent Supreme Court ruling knocked out most of his levies.
Businesses and consumers now face a different set of tariffs, which amount to taxes paid by importers for goods shipped into the U.S. Oftentimes, importers pass along tariff-related costs to consumers, raising retail prices.
The nation’s overall tariff rate has dropped, meaning some products have gained relief from tariff-related price pressures, some analysts told ABC News. But levies remain in place for nearly all imported goods, including duties as high as 50%, hiking costs for some companies and shoppers, they added.
“In general, we’ve seen tariffs pushing up on prices. That won’t go away,” Jason Miller, a professor of supply chain management at Michigan State University, told ABC News.
The high court ruled on Friday that the International Emergency Economic Powers Act (IEPPA) does not authorize Trump to impose levies, nullifying 70% of Trump’s tariffs after they collected more than $140 billion through December, the Yale Budget Lab found.
During his State of the Union speech on Tuesday, Trump criticized the Supreme Court decision, describing at as a “very unfortunate ruling,” and asserting that he retains the ability to impose tariffs under “fully approved and tested alternative legal statutes.”
In a social media post on Monday, Trump affirmed what he said was his authority to issue tariffs, saying he does not need to consult Congress before erecting new trade levies.
Trump also reiterated his commitment to his policy approach, warning other countries that they may face a “much higher Tariff, and worse.”
A 10% global tariff took effect on Tuesday, marking the first duty enacted by Trump since the high court’s decision. Trump issued the levy under Section 122 of the Trade Act of 1974, which allows the president to hike tariffs for 150 days as means of addressing “large and serious” balance-of-payments deficits, or disparities between a country’s total payments in transactions with other nations and its total earnings. In order to extend the Section 122 tariffs beyond 150 days, Trump would need to secure congressional approval.
Senate Minority Leader Chuck Schumer, D-N.Y., said this week that Democrats would oppose an extension of Section 122 tariffs, which could deny Trump the 60 votes necessary to overcome a potential Senate filibuster.
Trump has vowed to hike the Section 122 tariff to 15%. As of Tuesday, however, the president had not issued an order formalizing that increase.
A 15% Section 122 tariff would result in price increases amounting to $800 in additional costs for an average U.S. household over the next 150 days, the Yale Budget Lab projected.
“That’s hundreds of dollars that you’re going to be paying as a result of these tariffs,” Raymond Robertson, professor for trade, economics and public policy at Texas A&M University, told ABC News.
Robertson noted the ultimate cost impact may be slightly lower than projected as consumers shift away from products that display noticeable tariff-induced price hikes. But, he added, tariff-impacted products will be all but impossible for shoppers to avoid.
“These tariffs are hitting across the board,” Robertson said.
The Trump administration also plans to maintain sector-specific tariffs imposed under Section 232 of the Trade Expansion Act of 1962 and conclude pending investigations that could authorize additional levies, U.S. Trade Representative Jamieson Greer said in a statement on Friday.
That statute permits the White House to levy tariffs on products of importance to national security. Under the law, the White House must await the result of an investigation undertaken by the Commerce Department before imposing a tariff.
Under Section 232, for instance, steel and aluminum face a 50% tariff, putting upward pressure on prices for tableware, motorcycles, canned goods and assorted children’s products, analysts previously told ABC News.
A 50% tariff also applies to some copper products, while 25% tariffs remain for cars and auto parts. Those levies exclude a host of goods compliant with the United States-Mexico-Canada Agreement, or USMCA, a free trade agreement.
To be sure, some products will experience a reduction of tariffs in the aftermath of the Supreme Court decision. Products from China, Brazil, Vietnam and India will likely gain notable tariff relief, since those nations faced significant tariffs under the legal authority that was struck down by the Supreme Court, Miller said.
Electronics and clothing are among the products that could benefit from softer tariffs.
If the Supreme Court had opted to uphold tariffs issued under IEPPA, the nation’s effective tariff rate would have remained at 16%, the Yale Budget Lab said. Taking into account Section 122 tariffs, the effective tariff rate now stands at 13.7%, the group said.
“The good news for consumers is there’s an overall decrease in tariff rates,” Miller said. “What creates a challenge is we don’t know exactly what the new landscape will look like.”
Photo of Wall Street (Matteo Colombo/Getty Images)
(NEW YORK) — The Dow Jones Industrial Average plunged more than 1,000 points in early trading on Tuesday as the ongoing U.S.-Israeli war with Iran prompted a major selloff.
The Dow fell 1,075 points, or 2.2%, while the S&P 500 dropped 2%. The tech-heavy Nasdaq plummeted 2%.
Investor reaction on Tuesday sharply departed from the muted response a day earlier, when the major indexes closed essentially flat.
Oil prices, meanwhile, spiked for the second consecutive day as traders feared a prolonged blockade of the Strait of Hormuz, a trading route that facilitates the transport of about one-fifth of global oil supply.
The national average price of gasoline in the U.S. soared about 11 cents overnight to $3.11, AAA said on Tuesday.
President Donald Trump announced “major combat operations” against Iran on Saturday, with daytime strikes in the joint U.S.-Israel attack targeting military and government sites, officials said.
On Sunday, Iranian state television confirmed that Ayatollah Ali Khamenei was among those killed by airstrikes in Tehran.
Iran is responding to the U.S.-Israeli operation with missile and drone attacks targeting Israel, regional U.S. bases and Gulf nations. American diplomatic facilities have also been attacked.
U.S. Treasury yields ticked higher on Tuesday, suggesting possible concern about economic instability and inflation stemming from the Iran War.
Since bonds pay a given investor a fixed amount each year, the specter of inflation risks higher prices that would eat away at those annual payouts.
In turn, bonds often become less attractive in response to economic turmoil. When demand falls, bond yields rise.
ABC News’ Jon Haworth, Jack Moore, Nadine El-Bawab, David Brennan, Kevin Shalvey, Meredith Deliso and Leah Sarnoff contributed to this report.
Heart shaped boxes of chocolate are displayed for sale in Key West. (Jen Golbeck/SOPA Images/LightRocket via Getty Images)
(NEW YORK) — Valentine’s Day shoppers may feel jilted by runaway chocolate prices.
Chocolate prices soared 14.4% over the initial weeks of 2026 when compared to the same period a year earlier, nearly doubling the pace of price increases at the start of 2025, according to findings shared with ABC News by intelligence firm Datasembly.
The sharp rise in chocolate prices owes to a cocoa shortage caused primarily by adverse weather and crop disease in West Africa, which accounts for about 70% of the world’s cocoa, some analysts told ABC News.
The dearth of cocoa, analysts said, has ratcheted up input costs for chocolate makers and vaulted retail prices, leading to sticker shock in grocery and candy store aisles.
“There is a record gap between supply and demand,” David Branch, sector manager at the Wells Fargo Agri-Food Institute, told ABC News.
Raw cocoa bean prices have risen dramatically in recent years due to the choke in supply. A metric ton of cocoa beans cost as much $12,000 last year, Branch said. Before the COVID-19 pandemic, cocoa bean prices hovered between $2,000 and $2,500 per metric ton, International Monetary Fund data shows.
In recent months, supply problems have begun to ease, bringing cocoa bean costs down significantly from last year’s peak. A metric ton of cocoa beans now runs about $3,700.
Still, chocolate prices remain highly elevated as chocolate makers sell through candy made with cocoa beans bought earlier, analysts said.
“A lot of manufacturers bought cocoa when prices were high and that’s still very much moving through the supply chain,” David Ortega, a food economist at Michigan State University, told ABC News.
In November, the White House announced framework trade agreements with some Latin American countries in an attempt to ease surging prices for grocery staples such as cocoa. While the U.S. imports a significant share of cocoa from West Africa, supply also comes from Latin American countries like Ecuador, the U.S. Department of Agriculture says.
“Today’s announcements underscore the Administration’s unwavering commitment to fair and balanced trade at every opportunity to protect and strengthen our economic and national security,” the White House said when it unveiled the framework agreements.
Prices remain high for some other imported food items, such as coffee and beef.
Coffee prices surged about 18% in January compared to a year earlier, while ground beef prices climbed more than 17% over that span, Bureau of Labor Statistics data on Friday showed.
Grocery prices are rising at a faster pace than prices overall, climbing 2.9% over the year ending in January, according to BLS data.
Chocolate price hikes will likely ease over the coming months, some analysts said, noting the eventual pass through of lower cocoa prices into the cost of chocolate bought at stores. Analysts emphasized, however, the uncertainty surrounding the outlook due to the chance of weather-related challenges for growers.
Branch, of Wells Fargo, said chocolate prices could even fall by the latter part of this year as manufacturers find cost relief and pass it along to shoppers.
“If market trends stay where they are, we’ll see lower prices for Halloween,” Branch said.
