NEW YORK (NewsNation) — Consumer confidence has continued to decline as Americans feel the strain of new tariffs and rising prices.
The University of Michigan’s consumer sentiment index fell to 55.1 in September, down more than 5% from August and more than 21% compared to the same time last year. It’s the second-lowest point of 2025.
The decline comes as President Donald Trump’s new tariffs on home furnishings and remodeling supplies are set to take effect Wednesday.
Trump has said the duties, which include bathroom vanities and kitchen cabinets, are necessary to prevent other countries from “flooding” the U.S. market with inexpensive products.
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IKEA: Tariffs make affordability difficult
However, retailers like IKEA have warned the tariffs will make it more difficult to sell affordable, quality home furnishings.
The latest consumer price index report shows furniture prices are already rising. Living room, kitchen and dining sets are up 9.5% since August 2024, while furniture and bedding costs increased nearly 5% overall, and household supplies were up by about 3%.
Trump also imposed new tariffs on pharmaceutical drugs, heavy trucks and lumber.
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EV tax credit set to expire
Time is also running out for consumers to claim the $7,500 federal EV tax credit, which is set to expire Tuesday.
To qualify, electric vehicles must be assembled in North America with at least 50% domestic components and meet price caps of $80,000 for vans, SUVs and trucks, and $55,000 for all other vehicles. The IRS is waiving those rules for leased vehicles.
Some used EVs may also qualify for a $4,000 credit if they were purchased from a licensed dealer for $25,000 or less.
Consumers can check eligibility by visiting FuelEconomy.gov and running the car’s VIN through the National Highway Traffic Safety Administration database, then confirming with their dealer before making a purchase.
