Consumer confidence on where US economy is headed plunges to 12-year low
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US households are bracing themselves for higher inflation over the next year, according to the survey.
PHOTO: BLOOMBERG
Danielle Kaye
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NEW YORK - Americans are increasingly anxious about their jobs and finances as the Trump administration’s trade policies and government cutbacks stoke concern about the economy.
The Conference Board’s monthly confidence index of current conditions dropped more than expected to 92.9, the fourth consecutive monthly contraction that began after US President Donald Trump was elected in November 2024.
The measure for future expectations was even more dismal, with the index tumbling to 65.2 – the lowest reading in 12 years and well below the 80 level that is considered a signal for a recession ahead.
Economists have warned that Mr Trump’s plans for sweeping tariffs on the US’ biggest trading partners could reignite inflation. Whiplash from shifting trade policies, and investors’ concern about a potential slowdown in the US economy,
US households are bracing themselves for higher inflation over the next year, according to the survey, with 12-month inflation expectations rising to 6.2 per cent, from an outlook of 5.8 per cent in February. (Over the most recent 12 months, the inflation rate was 2.8 per cent, according to the consumer price index for February.)
Consumers are “spooked” by the Trump administration’s trade wars, cuts to the federal government by the so-called Department of Government Efficiency, and the recent stock market sell-off, said Mr Bill Adams, chief economist at Comerica Bank.
“When people fear for their jobs, they will cut back on discretionary spending on vacations and going out, and delay big purchases like new houses, cars or appliances,” Mr Adams said. He added that the length of the downturn in consumer sentiment was hard to predict.
Mr Stephen Miran, chair of the White House Council of Economic Advisers, played down the drop in consumer confidence in an interview with CNBC on March 25. “Folks often let their political views influence their views of the economy,” he said.
The latest Conference Board survey added to growing evidence that uncertainty about tariff policies is making consumers less confident about the economic outlook and more worried about inflation. Data from the University of Michigan released in March showed consumer sentiment plummeting 11 per cent from February as Americans of all ages, income groups and political affiliations turned even more downbeat. NYTIMES