Consumer confidence in the United States deteriorated at its sharpest pace in three and a half years during February, as 12-month inflation expectations surged significantly. This added further evidence of growing concerns among Americans about the potential negative economic impacts of President Donald Trump’s administration policies.
A survey by the Conference Board, an independent economic research organization, indicated on Tuesday that “comments regarding the current administration and its policies dominated the responses.” This means that most of the survey responses were primarily focused on the Trump administration and its economic or political policies, making these remarks the most prominent aspect of the feedback.
This comes after surveys conducted last week showed a sharp decline in business and consumer sentiment in February. Tariffs on imports, imposed or planned by Trump, were cited as the primary concern in most surveys involving households and businesses.
Economists pointed out that unprecedented layoffs in the federal government were also affecting consumer sentiment, posing a threat to consumer spending, which is the main driver of the economy. They stated: “Americans have become more pessimistic about the future. No government has ever threatened mass layoffs of its employees in this manner, and this uncertainty is now significantly worrying consumers.”
Experts warned that this situation could lead to a sharp economic slowdown in the first quarter of the year if consumers continue to cut spending and prefer to stay at home due to fears of job losses or general uncertainty.
The Consumer Confidence Index dropped by 7 points, marking its biggest decline since August 2021, reaching 98.3 this month. Economists polled by Reuters had expected the index to decline only to 102.5. This marks the fourth consecutive monthly decline, pushing the index to its lowest level.
On Tuesday, February 26, 2025, U.S. stock markets saw a significant decline, driven by increasing concerns over the economic consequences of Trump’s trade policies, particularly regarding tariffs on imports.
The drop in consumer confidence has further intensified concerns about consumer spending and economic growth, reinforcing fears that continued policy uncertainty could weigh heavily on financial markets and overall economic stability.
