(NewsNation) — Consumer confidence fell sharply in February as Americans grew more pessimistic about the future of the economy with inflation and President Donald Trump’s tariffs top of mind.
The Conference Board’s Consumer Confidence Index fell seven points to 98.3 this month, down from 105.3 in January, the largest monthly decline since August 2021.
The index that measures consumers’ short-term outlook for income, business and labor market conditions dropped even more, about nine points, and is now below the threshold that usually signals a recession ahead.
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Part of the increasingly negative outlook is due to anxiety around inflation, which accelerated faster than economists expected in January. Soaring egg prices, which are expected to continue climbing, have been the most visible reminder.
Respondents to the Conference Board’s latest survey expressed concern over rising prices but there was also a “sharp increase” in the mentions of trade and tariffs, the business research group said.
“Most notably, comments on the current Administration and its policies dominated the responses,” Stephanie Guichard, senior economist, global indicators at the Conference Board, said in a release.
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President Trump said Monday that his tariffs on Canada and Mexico are starting next month. It’s a move experts have warned could hurt economic growth and worsen inflation.
February’s plunge in consumer confidence marks the third consecutive month-on-month decline, a concerning trend given that consumer spending accounts for about two-thirds of U.S. economic activity.
The fall in confidence was broad across age groups and incomes. Consumers felt more pessimistic about current and future labor market conditions as well as their income prospects.
The share of consumers anticipating a recession over the next 12 months also hit a nine-month high.
Tuesday’s Conference Board report is just the latest sign that American consumers are feeling worse about the economy.
Retail sales fell 0.9% in January from the previous month, the biggest decline in a year, though historically cold weather was likely a factor.
A separate report from the University of Michigan last week showed a drop in consumer sentiment. Many of the consumers surveyed, about 40%, mentioned tariffs.
