A shopper looks at egg cartons at a grocery store in New York City on February 12, 2025. Photographer: Yuki Iwamura/Bloomberg.
U.S. consumer confidence fell this month by the most since August 2021 on concerns about the outlook for the broader economy, adding to evidence that uncertainty over the Trump administration’s policies is weighing on households.
The Conference Board’s gauge of confidence decreased by 7 points in February, to 98.3, marking the third straight decline, according to data released yesterday. The figure was below all estimates in a Bloomberg survey of economists.
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A measure of expectations for the next six months also fell by the most in three-and-a-half years, while a gauge of present conditions declined more modestly. The drop in confidence was broad across age groups and incomes. Consumers are more pessimistic about current and future labor-market conditions, as well as about the outlook for incomes and business conditions. Perceptions of present and future financial situations worsened, and the share of respondents expecting a recession in the next year rose to a nine-month high.
“References to inflation and prices in general continue to rank high in write-in responses,” Stephanie Guichard, senior economist of global indicators at The Conference Board, said in a statement. “Most notably, comments on the current administration and its policies dominated the responses.”
Tuesday’s report reinforces other surveys that show consumer and business sentiment is waning after an initial surge of optimism in the wake of Donald Trump’s election victory. Households and companies now appear more wary of higher prices due to tariffs, especially as inflation pressures seem to be intensifying again and the labor market gradually cools. Some companies have started to take notice.
“The consumer right now is confused,” said Scott Baxter, CEO of Kontoor Brands Inc., the maker of Lee and Wrangler jeans brands, during the company’s quarterly call with analysts Tuesday. “If you just put yourself in their seat, they’re worried about work. They’re worried about the businesses that they’re in. Are those going to be impacted by some of the layoffs, the tariffs, the current situation right now?”
Expectations for inflation over the coming year increased to the highest level since May 2023, reflecting the recent jump in the cost of eggs as well as anticipated higher prices from Trump’s planned tariffs. A separate report from the University of Michigan, released last week, showed U.S. consumers’ long-term inflation expectations rising to the highest level in almost three decades.
Federal Reserve officials including Chair Jerome Powell have signaled they’re keeping interest rates steady until progress on inflation resumes. For the first time since July, a majority of respondents said they expect higher interest rates in the year ahead, according to the confidence report.
What Bloomberg economists say...“Post-election swings in consumer attitudes tend to be short-lived, with consumers focusing more on fundamentals like jobs and incomes. Recent financial market turbulence reflects uncertainty over how Trump administration policies will impact inflation, jobs, and the economic outlook.”— Eliza Winger |
Elevated borrowing costs are weighing on buying conditions for big-ticket items like cars and certain appliances. The share of consumers planning to take a vacation in the next six months declined to the lowest since April 2021. And the share of consumers who said jobs are plentiful ticked down, while the share saying jobs are hard to get rose for the first time in five months. The difference between these two—a metric closely followed by economists to gauge the job market—narrowed for a second month.
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