The plummeting mood of American consumers — with tariffs and inflation as key sources of alarm — is a flashing yellow signal for President Trump and the GOP.  That’s the caution marked by a Bloomberg report today that “consumer sentiment unexpectedly fell” in May “to the second-lowest level on record,” meaning back to the late 1940s, while Americans’ appraisal of their own finances has fallen to the lowest level since 2009, after the 2008 financial crisis.

With the economy ranking in 2024 as the top concern of the voters who launched Mr. Trump back into office, do these findings suggest the potential danger of buyers’ remorse? The plunge in mood echoes a similar fall in consumer confidence to levels not seen since May 2020 when the Covid pandemic was raging. It was the fifth consecutive fall in the Conference Board’s confidence measure, in itself the longest run of monthly declines since the 2008 crisis. 

The data, in Bloomberg’s telling, “illustrate growing consumer apprehension that higher duties on foreign goods will damage the economy and job market,” while also “pushing up prices.” A senior economist at the Conference Board points to “pervasive pessimism about the future,” with expectations for “business conditions, employment prospects, and future income” all deteriorating “sharply.”

This widespread consumer gloom is an echo of the malaise that afflicted the electorate in the leadup to the election. That’s when the Times condescendingly asked, with inflation “Basically Back to Normal,” as its headline averred, “Why Do Voters Still Feel Blah?” The reason, these columns explained, was that Americans “are not dumb.” Even if the inflation’s pace had slowed, voters were still shell-shocked by the 20 percent price surge under President Biden.

The value of Americans’ dollars was at that point plunging, in terms of gold, to less than a 2,700th of an ounce. So even as prices soared, and then refused to retreat back to their pre-Biden inflation levels, the value of the dollar was dropping. Some six months later, the dollar’s value has fallen further yet, to a little more than a 3,200th of an ounce of gold. Inflation chugs along at more than 2 percent annually, higher than the Fed’s own lax target.

It’s hard to see this as a vindication of Mr. Trump’s campaign pledge to “Defeat Inflation,” as his platform promised. At the time, we saw that as spotlighting the logic of “restoring sound money and abandoning the system of fiat currency that has saddled our government with debt and debased the value of the dollar.” Yet so far, the new administration seems to be more interested in pursuing a weaker dollar, as a means to make exports more competitive.

Mr. Trump’s tariff proposals, too, are sowing uncertainty for businesses that are having trouble planning ahead absent clear guidance on what levies will be imposed. The risk of further price inflation is underscored by the boost, to 23 percent, in the average effective tariff rate, which is, Harvard Business Review reports, 10 times higher than last year’s level. Even if the tariffs are a negotiating tool, Mr. Trump says that a 10 percent tariff is the new norm. 

In 2024, America imported more than $3 trillion in goods from abroad, so it’s hard to see how further inflation can be avoided if incoming products are taxed by 10 percent — unless spending is cut. All the more reason for Mr. Trump to pursue an anti-inflation agenda that centers on monetary reform. That would require a hard look at our fiat money system that has, since 1971, seen the dollar’s value plunge while enabling a vast runup in the national debt.

The consumer angst also underscores the urgency for Republicans in Congress to pass a budget that tackles the crisis of federal overspending while ensuring that Mr. Trump’s signature tax cuts are renewed. Failure to extend the cuts would put a crushing burden on taxpayers and hamper economic growth at a critical moment. If Republicans can’t overcome their dysfunction and get a budget bill passed, consumers’ gloom is likely to grow.