Consumer sentiment sours amid trade war, recession fears: Survey
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(NEW YORK) — Consumer attitudes soured in March alongside slumping markets and growing concern about a possible recession, University of Michigan survey data on Friday showed. Sentiment worsened more than economists expected.
The figure marked the third consecutive month of dampening consumer attitudes, data showed.
Expectations about future economic conditions worsened in a slew of key areas, including personal finances, labor markets, inflation and stock markets, the survey said.
Consumer sentiment soured among both Democrats and Republicans, though it dropped more among Democrats, data showed.
On Thursday, the S&P 500 closed down more than 10% since a peak attained last month, meaning the decline officially qualified as a market correction. It marked the index’s first correction since October 2023.
The major stock indexes recovered some losses in early trading on Friday.
Consumers expect the inflation rate to rise to 4.9% over the next year, according to the survey, which marks a significant jump in year-ahead inflation expectations compared to survey results in February.
The current inflation rate stands at 2.8%, nearly a percentage point higher than the Federal Reserve’s target of 2%.
President Donald Trump’s tariffs last week set off an escalating global trade war. The U.S. slapped 25% tariffs on Mexico and Canada, some of which were delayed. Trump also imposed a 10% tariff on China, doubling taxes on Chinese imports to 20%.
Trump’s 25% tariffs on all imported steel and aluminum products took effect on Wednesday.
The array of duties on imported goods prompted retaliatory measures from China, Canada and the European Union.
Tariffs of this magnitude are widely expected to increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers.
Higher prices and looming economic uncertainty could scare off consumers, experts previously told ABC News. Consumer spending accounts for about two-thirds of U.S. economic activity.
Goldman Sachs last week hiked its odds of a recession from 15% to 20%. Moody’s Analytics earlier this week pegged the probability of a recession at 35%.
This is a developing story. Please check back for updates.
(NEW YORK) — While some companies are steering away from diversity, equity, and inclusion (DEI) policies, others are sticking with their previous commitments.
Leaders at Goldman Sachs, Costco and JPMorgan Chase & Co have recently spoken out in support of their diversity programs, as anti-DEI activist shareholders continue to push proposals that would roll back company policies.
Costco’s Board of Directors unanimously voted Thursday against a proposal from the National Center for Public Policy Research that had called for Costco to evaluate and publish a report on any risks that may be associated with the company’s diversity and inclusion efforts, according to a Jan. 23 shareholders meeting statement.
“Our efforts around diversity, equity and inclusion follow our code of ethics,” the board statement on the proposal stated. “For our employees, these efforts are built around inclusion – having all of our employees feel valued and respected. Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all. We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed.”
The board argued that its diversity programs comply with the law, and defended its commitments to diversifying its supplier base — including special attention to small businesses. The board statement ultimately argued the proposal reflected a “policy bias.”
Costco representatives have not responded to ABC News’ request for comment.
Amid ongoing pressure over its DEI initiatives, a Goldman Sachs spokesperson told ABC News in a statement: “We strongly believe that organizations benefit from diverse perspectives, and Goldman Sachs is committed to operating our programs and policies in compliance with the law.”
Goldman Sachs representatives directed ABC News to a Jan. 22 interview with CNBC from CEO David Solomon, in which Solomon said that the financial services company is looking at these issues “through the eyes of our clients.”
He added, “They think about decarbonization, they think about climate transition,” he said. They think about their businesses, how they find talent, the diversity of the talent they find all over the world. You know we operate a big global business and we serve global clients everywhere. We think about these issues through the lens of, how do we help our clients navigate these things? And we continue to stay focused on talking to our clients and doing the things we’ve always done.”
The company has come under scrutiny for its stated commitments to racial equity, gender equality and increasing diversity. Strategies listed on its website include expanded recruitment efforts, pay gap data collection, aspirational hiring goals and career development programs.
JPMorgan Chase CEO Jamie Dimon, in an interview with CNBC, said he’s “very proud of what we’ve done.”
“We will continue to reach out to the Black community, the Hispanic community, the veterans community, LGBTQ, we have teams with second chance initiatives — where I go, with blue states, red states, governors, they like what we do,” said Dimon.
JPMorgan Chase did not respond to request for comment.
DEI initiatives, according to ABC News interviews with DEI experts, are intended to address and correct discriminatory policies or practices that may be found within an organization. Experts told ABC News that some examples of DEI initiatives include: implementing accessibility measures for people with disabilities, addressing gender pay inequity, mitigating bias in hiring and recruitment practices, and holding anti-discrimination trainings and more.
Several other companies across industries — including Amazon, Meta and McDonalds — have stepped back and ended their diversity and inclusion initiatives that were largely pledged after the police killing of George Floyd and subsequent protests against racial inequality.
The reversal comes amid ongoing anti-DEI action from conservative politicians, who have implemented policies restricting diversity and equity programs in government, colleges, universities, and more. After taking office this week, President Donald Trump signed an executive order dismantling DEI programs in the federal government.
In an interview with ABC News, Ethan Peck, deputy director for the National Center for Public Policy Research’s Free Enterprise Project, said that diversity programs pose risks to shareholder value, as they may invite lawsuits from those claiming to have been discriminated against based on recent arguments made against affirmative action.
Some legal experts disagree, arguing that repealing DEI policies could leave companies vulnerable to potential lawsuits from marginalized groups alleging discrimination.
Peck, whose group mounts campaigns to pressure companies to disband DEI programs, argued that diversity programs sacrifice “excellence and innovation,” but said he did not provide examples of employment discrimination at these companies.
“Eventually you will drop DEI, and it’s better for your shareholders if you do it sooner rather than later,” said Peck, who noted that Boeing and John Deere were faced with similar proposals and later dropped their diversity, equity and inclusion programs.
“I believe that this is a fad,” he said.
Anti-DEI activists also argue that “aspirational” goals for increasing diversity and representation are a guise for quotas, which are largely considered illegal, according to the Equal Employment Opportunity Commission.
“You can be fair in hiring and promotions with candidates of all backgrounds and perspectives without resorting to quota systems and considerations based on immutable characteristics,” said Paul Chesser, the director of the Corporate Integrity Project at the National Legal and Policy Center, in an emailed statement.
Christie Smith, former vice president of inclusion and diversity at Apple and C-Suite adviser, argued that DEI commitments instead increase shareholder value.
DEI has prompted “increased innovation, increased growth in these organizations, increased opportunities in startup organizations, which mostly women and people of color are at, starting these kinds of companies and growing our economy in that way,” she told ABC News.
(NEW YORK) — China issued a warning on Wednesday night that it stands ready for any “type of war” with the United States in the aftermath of tariffs imposed hours earlier by the Trump administration.
A spokesperson for the Chinese foreign ministry said the tariffs would not lead to a resolution of U.S. concerns about fentanyl originating in China.
“If the U.S. truly wants to solve the fentanyl issue, then the right thing to do is to consult with China on the basis of equality, mutual respect and mutual benefit to address each other’s concerns,” Chinese spokesperson Lin Jian said at a press conference late Tuesday.
“If the U.S. has other agenda in mind and if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” Jian added.
The remarks came soon after the Trump administration imposed 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on imports from China. The fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China last month.
Within minutes of the new U.S. tariffs taking effect, China unveiled on Tuesday its initial response by placing additional 10% to 15% tariffs on imported U.S. goods, like chicken, wheat, soybeans and beef.
Those duties will be on top of similar tariffs imposed back during the first Trump administration’s trade war in 2018. Some of those tariffs are already at 25%, though Beijing issued some waivers as a result of the 2020 “phase one” trade deal.
The new Chinese tariffs are set to come into effect for goods shipped out next Monday, March 10.
In a series of social media posts last month, Trump said he would place tariffs on Canada, Mexico and China for hosting the manufacture and transport of illicit drugs that end up in the U.S.
During an address to a joint session of Congress on Tuesday night, Trump also sharply criticized tariffs imposed by the Chinese government on U.S. goods.
“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement on Tuesday.
Commerce Secretary Howard Lutnick said on Tuesday afternoon that Trump may soon offer Canada and Mexico a pathway to relief from tariffs placed on some goods covered by North America’s free trade agreement.
Lutnick did not mention a potential compromise with China.
(DALLAS) — A shift is on the horizon at Southwest Airlines. The carrier known for its customer-friendly policies and affordable airfare announced changes to its baggage and fare structure in an effort to cater to a broader range of travelers.
While the low-cost airline has long stood out for offering two free checked bags for all passengers, starting May 28, some customers will see charges for checked baggage.
The most notable change from the Dallas-based carrier that was announced Tuesday impacts those not holding certain status levels with Southwest’s Rapid Rewards program.
Southwest Airlines will continue to offer two free checked bags to Rapid Rewards A-List Preferred Members as well as its Business Select travelers.
A-List Members and other select customers will still receive one free checked bag, the airline said. However, those without qualifying status will now face a charge for their first and second checked bags, subject to weight and size limitations.
“We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don’t compete for today, and return to the levels of profitability that both we and our shareholders expect,” President and CEO Bob Jordan said.
Why Southwest is changing baggage fees?
For passengers traveling on lower-priced fares, such as Wanna Get Away or Wanna Get Away Plus, the changes outlined reflect a move toward more targeted options for a range of travelers from budget conscious to frequent flyers, which the airline hinted at in December.
Southwest Rapid Rewards program points changes, assigned seats and more
In addition to the new baggage fees, Southwest’s Rapid Rewards program will also have some changes for earning points.
Customers who fly Business Select will earn more points, while those on lower-tier options — like Wanna Get Away fares — will earn fewer.
The airline is also introducing a new Basic fare category for the lowest-priced tickets starting May 28 ahead of rolling out assigned seating and extra legroom options.
“We’re evolving our business to create more choice for our current and future customers,” Jordan said.
Southwest is working to expand its reach with flights now available to book through Expedia, and an industry-standard partnership with Icelandair.
Flight credits issued for tickets purchased on or after May 28 will expire one year or earlier from the date of ticketing, depending on the fare type purchased.
