Consumer confidence in the United States has taken a notable hit, reflecting growing public unease over major economic policy shifts, particularly in trade and tariffs under the Trump administration. According to the Conference Board, the consumer confidence index dropped by 7.0 points in February, reaching an eight-month low of 98.3. This marks the third consecutive decline since the index peaked at 112.8 in November, shortly after Donald Trump’s election victory.
Key Indicators of Declining Confidence
Economists polled by The Wall Street Journal had expected a reading of 102.4, but the index instead fell below predictions, highlighting the increasing concern among Americans about inflation, employment prospects, and income stability.
Inflation Worries Mount
One of the biggest contributors to the decline in consumer sentiment is inflation. A significant rise in egg prices, along with fears of further cost increases due to potential Trump tariffs on foreign goods, has led many Americans to believe that inflation is worsening. According to Stephanie Guichard, a senior economist at the Conference Board, mentions of trade and tariffs surged to levels unseen since 2019.
Employment and Income Concerns Grow
Beyond inflation, Americans also expressed concerns about job availability and future earnings. The expectations index, which measures consumer sentiment on the economy’s outlook for the next six months, fell sharply by 9.3 points to 72.9—another eight-month low. Historically, a reading below 80 is considered a potential recession signal, although most respondents do not yet believe a downturn is imminent.
Economic Uncertainty Weighs on Markets
The initial surge in optimism following Trump’s election win has faded, giving way to uncertainty as his administration’s economic policies take shape. Markets reacted negatively to the consumer confidence report, with both the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) extending losses on Tuesday.
Jennifer Lee, a senior economist at BMO Capital Markets, noted that “Americans are feeling a little more nervous about how things are playing out these days, and it is starting to really show up in some of the data.” With the evolving landscape of trade negotiations, tariffs, and fiscal policy, consumer confidence will likely remain volatile in the coming months.
