The American consumer is growing increasingly anxious about the economy, with sentiment surveys indicating a sharp decline in confidence. The latest data from The Conference Board’s Consumer Confidence Index for February showed a fall to 98.3, marking the largest monthly drop since August 2021. This decrease coincides with rising expectations for inflation and a souring economic mood.
Homebuilders, small businesses, and even US consumers are uncertain about the economy’s future due to President Donald Trump’s aggressive approach to tariffs. The National Federation of Independent Business’ Uncertainty Index has reached its third-highest reading on record, reflecting growing concerns.
Economists warn that if Americans expect inflation to rise, they will adjust their spending accordingly, which can create a self-fulfilling loop. However, some officials suggest that the Federal Reserve may not sound the alarm on inflation expectations yet, instead focusing on monitoring people’s perception of prices.
A recent survey by Wells Fargo found that about three-quarters of adults and 203 teens plan to reduce their spending due to economic uncertainty. Younger generations are particularly affected, with Gen Z adults and Millennials planning to pare back their spending in the coming months.
The ongoing trade tensions and inflation concerns have sparked a stunning reversal from the post-election optimism seen in November. As economist Justin Wolfers notes, “the White House is sowing uncertainty just about everywhere,” which could lead to self-inflicted economic woes if not addressed.
Source: https://edition.cnn.com/2025/02/25/economy/us-consumer-confidence-february/index.html