Washington, D.C. — Consumer confidence in the U.S. economy has dropped for five consecutive months, reaching its lowest level since the start of the COVID-19 pandemic. The Conference Board announced on Tuesday that its consumer confidence index fell by 7.9 points in April, settling at 86. This marks the weakest reading since May 2020 and reflects growing unease among Americans regarding economic prospects.
A significant number of consumers are expressing concerns about the potential decline in hiring in the coming months, with nearly one-third anticipating layoffs or reduced availability of jobs. This level of apprehension closely resembles feelings reported during the depths of the Great Recession in April 2009. The downturn in confidence is largely attributed to the widespread tariffs implemented by the previous administration, which many believe threaten future economic growth.
A targeted survey indicated that nearly half of Americans harbor concerns about a possible recession. This anxiety is compounded by expectations of rising prices due to tariffs, which have led individuals to question the sustainability of current economic conditions.
The Conference Board’s index also revealed a sharp decline in short-term expectations regarding income, business conditions, and the job market, dropping 12.5 points to 54.4. This figure is notably below the threshold of 80, a level typically associated with an impending recession. The implications of this sentiment on consumer spending, hiring practices, and overall economic growth will soon come into sharper focus.
The government is set to report on the nation’s economic growth during the first quarter, with many economists forecasting a sharp deceleration due to reduced consumer spending following the robust holiday shopping season. The anticipated report could provide crucial insights into how consumer sentiment is influencing the economy during this uncertain time.
Additionally, the Labor Department will release its hiring and unemployment report later this week. Although job gains are still expected, some economists caution that the numbers may reveal a significant slowdown in hiring activity. This potential decline in consumer confidence aligns with recent volatility observed in the stock and bond markets, which have also experienced sharp fluctuations.
The downturn in consumer confidence is widespread, affecting all demographics, but it has been most pronounced among those earning above $125,000 and individuals aged 35 to 55. Despite a recent rebound in major U.S. stock markets, the year-to-date performance remains negative, with the S&P 500 down 6%, the Dow Jones losing 5%, and the Nasdaq dropping 10%.
As Americans navigate this challenging economic landscape, the implications of lowered confidence levels will likely extend beyond individual households, potentially impacting broader markets and future economic strategies.