Consumer confidence has fallen to its lowest level in 12 years, signaling deep concerns about the state of the U.S. economy. The latest report from The Conference Board reveals that Americans’ expectations for income, business conditions, and job prospects have plummeted, with the index dropping 9.6 points to 65.2. Historically, a reading below 80 has been a strong indicator of an impending recession.
The proportion of consumers anticipating a recession remains at a nine-month high, reflecting widespread anxiety over inflation, tariffs, and economic instability. The stock market’s recent 10% correction, coupled with rising costs for essential goods, has further eroded confidence. The University of Michigan’s consumer sentiment index has also declined for the third consecutive month, reinforcing the bleak outlook.
The Trump administration has downplayed the significance of the confidence drop, arguing that consumer spending remains strong despite pessimistic survey results. However, major retailers are sounding the alarm, with Walmart, Target, and Macy’s all reporting weaker sales forecasts due to economic uncertainty and tariff pressures.
Inflation remains a persistent concern, with median year-ahead inflation expectations climbing for the fourth straight month. Consumers are increasingly worried that price hikes will erode their purchasing power, forcing them to cut back on discretionary spending. The Federal Reserve’s tightening policies have done little to ease inflation fears, as borrowing costs continue to rise across the board.
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