US Consumer Confidence Hits Lowest Point Since COVID: Is the Trade War Fueling Anxiety?

Americans are feeling more uncertain about the economy, with consumer confidence dropping for five consecutive months. The latest data shows that confidence is at its lowest point since May 2020, shortly after the COVID-19 pandemic began. The Conference Board’s consumer confidence index fell by 7.9 points in April, settling at 86. This decline mirrors concerns many had during the Great Recession in 2009, especially with one-third of consumers predicting a slowdown in hiring.

This sour mood is largely driven by worries about rising prices, largely due to tariffs imposed by the Trump administration. A recent survey from the AP-NORC Center revealed that nearly half of Americans fear we might be heading into a recession. “When consumers get nervous, they tend to spend less,” says Carl Weinberg, the chief economist at High Frequency Economics. “If confidence continues to drop, overall growth will slow down.”

Americans’ expectations about their income, business conditions, and job prospects have also weakened significantly, dropping to the lowest levels in over 13 years. Experts believe that when this kind of pessimism sets in, it often precedes economic downturns.

This week, we’ll get a clearer picture of the economy as the government releases data on economic growth from the first quarter of the year. Many economists are predicting a slowdown in growth, especially after a strong holiday shopping season. Meanwhile, the Labor Department will report on hiring trends. Some analysts foresee a decline in new job opportunities, despite the expectation of steady job growth overall.

The shaky state of financial markets is contributing to the decline in consumer confidence. The S&P 500, for instance, is down 6% for the year, and market instability has stirred anxiety across various age groups and incomes. However, the most significant drops were seen in households earning above $125,000 and among those aged 35 to 55.

Interestingly, mentions of tariffs in consumer feedback were at an all-time high this month, indicating that these trade policies are affecting everyday life. The current tariff rates include a 10% levy on almost all imports and an even higher 145% tariff on many goods from China.

As worries of a potential recession grow, fewer people plan to buy homes or cars in the coming months. Sales of previously owned homes have also stagnated, partly due to high mortgage rates and rising property prices. Additionally, many Americans are planning to cut back on spending for vacations and dining out—a stark contrast to the more carefree spending habits seen just a few months prior.

This shift in consumer behavior comes as people reassess their financial priorities in light of economic uncertainty. Only 16.4% of Americans plan to travel abroad in the next six months, down from 24.1% last December. Dining out has also seen a dip in demand, with the number of consumers intending to increase their restaurant visits declining significantly.

The economic landscape is changing rapidly, and it’s crucial to stay informed on these developments. Understanding these trends can help us better navigate our own financial decisions in an increasingly unpredictable world.

For further information, you can check more about consumer sentiments and economic forecasts on platforms like The Conference Board and Associated Press.

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Donald Trump, Financial markets, International trade, General news, Tariffs and global trade, Economy, Business, United States government, Inflation, Government policy, Carl Weinberg, U.S. news, Economic policy, Recessions and depressions, COVID-19 pandemic, U.S. News