In February, U.S. consumer confidence saw its steepest decline in 3.5 years, alongside a surge in 12-month inflation expectations. Key factors contributing to this downturn include President Trump's tariffs on imports and mass firings of federal workers. The Conference Board survey revealed that these issues greatly influenced consumer sentiment, with economists warning that such layoffs could significantly impact consumer spending. The Conference Board's confidence index fell 7 points to 98.3, reaching its lowest level since June 2024, as fears of an economic slowdown intensified.
Americans are increasingly pessimistic about the outlook. No Federal government has ever before threatened government workers with mass firings and it is starting to scare the daylights out of consumers.
The Conference Board's consumer confidence index dropped 7 points, the biggest decline since August 2021, to 98.3 this month. It is now at the bottom of the range that has prevailed since 2022.
Tariffs on imports, which Trump has already imposed or is planning to, have been singled out as the major issue in almost every survey of households and businesses.
The economy could well ground to a halt in the first quarter of the year as consumers stay home.
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