Consumer confidence in the US continues its sharp decline in 2025 as American views on financial futures plunged to their 12-year lows driven by growing anxiety about tariffs and inflation.
The conference committee reported Tuesday that its consumer confidence index fell 7.2 points in March to 92.9, the fourth consecutive monthly decline since January 2021 and its lowest reading. According to a FactSet survey, this reading was not enough to meet analysts’ expectations for a 94.5 reading.
The business group found that the measure of Americans’ short-term expectations for income, business and job markets fell to 65.2, down 9.6 points.
This is the lowest read of 12 years, well below the 80 threshold. The conference committee says it can show potential recession in the near future. The proportion of U.S. consumers anticipating a recession remains at a nine-month high, the board reported.
“Consumer optimism about future income, which had been very strong in the past few months, has largely disappeared, suggesting that concerns about the economy and labor market have begun to spread to consumer evaluations of personal circumstances.”
US President Donald Trump’s on and off tariffs are planning the economy by economists who said they are challenging the economy and uncertainty describing the economy.
Trump said Monday that not all of his threatened duties will be imposed on April 2, and that some countries could get a break, but that tariffs on imported cars will soon be coming.
“Consumers are rattling,” says Carl Weinberg, chief economist in radio frequency economics. “I would like to express my opinion that Washington’s confusion has something to do with this because of personal risk. The decline in consumer sentiment since the November election is no longer possible to amortize by chance.”
In the University of Michigan Consumer Sensation Measure, the fourth drop in trust, reflecting similar degradation earlier this month, erased all the benefits notched in the aftermath of Trump’s election victory in November.
“Meaningful Pressure” on Profit
The Trump administration has looked down on the sour atmosphere among Americans. The argument is similar to what former US President Joe Biden administration officials said because high inflation curtailed consumer trust without compromising growth.
But some of the nation’s biggest retailers who are focusing on changing consumer behavior have spoken about different things.
Walmart thrives with Americans seeking bargains to offset higher prices. However, later last month, the country’s biggest retailer cut its profit forecast for the year significantly. Its sales outlook is also conservative, with the company not including the potential impact of tariffs in its 2025 forecast.
Target’s sales and profits slipped into a crucial holiday quarter. The company predicted that there would be “meaning pressure” in the profits of starting the year due to tariffs in Mexico, Canada and China.
Macy’s, Best Buy, Abercrombie & Fitch, and Dollar General have also been cautious about their expectations for 2025, with many citing “economic uncertainty.”
A conference committee survey showed a decline in plans to buy both homes and cars. However, given the anxiety of respondents given their future concerns, it was surprisingly surprising, and their intention to purchase expensive items such as electrical appliances increased. The board said it could reflect a desire to buy before tariffs begin and prices rise.
Inflation has receded from its highs during post-pandemic rebounds, but has surpassed the Federal Reserve 2% target. Coupled with the announced tariffs on many imports, these still announced prices make Americans feel sour about spending as an economic concern.
Consumers seemed more and more confident towards the end of the year holidays, and were generous at the end of 2024. A month later, US retail sales fell sharply in January 2025, but cold weather shared some of the responsibility.
Earlier this month, the government reported that Americans had strengthened their spending in February after a sharp early pullback, but only a small amount.
The board reported Tuesday that consumer views on current terms fell 3.6 points to 134.5.
The Consumer Trust Index measures both an assessment of the current economic situation of Americans over the next six months and its outlook.
Consumer spending accounts for about two-thirds of US economic activity, and is closely monitored by economists for indications about how American consumers feel.