The latest figures released Tuesday morning reveal a notable drop in consumer confidence throughout February, with many Americans increasingly anxious about the future of the US economy.
The Consumer Confidence Index from The Conference Board slipped to 98.3 this month, down from a revised figure of 105 in January and falling short of economists’ forecast of 102.5.
“As we entered February, we saw the steepest decline in consumer confidence since August 2021,” explained Stephanie Guichard, a senior economist specializing in global indicators at The Conference Board. “This marks the third consecutive monthly dip, and the index has now plunged to the lower end of the range that’s been persistent since 2022.”
The Present Situation Index, which looks at consumers’ assessment of current business and job market conditions, slid to 136.5 this month, a decrease from January’s 139.
Similarly, the Expectations Index, which gauges short-term prospects for income, business, and job conditions, dropped to 72.9 in February from 82 the previous month. Historically, when this index falls below 80, it often signals a potential recession within the year—a threshold it hasn’t breached since June 2024.
Inflation concerns are also climbing, with average 12-month inflation expectations rising from 5.2% last month to 6% in February.
Guichard pointed out, “This uptick likely stems from various influences, like persistent inflation, increased prices on everyday essentials such as eggs, and anticipated tariff impacts. While inflation and pricing remain prominent topics in responses, there’s been a noticeable shift towards other issues.”
“In particular, there has been a significant rise in mentions of trade and tariffs, levels we haven’t seen since 2019. Additionally, discussions about the current Administration and its policies were prevalent in the feedback received.”
