Consumer confidence is a key economic indicator that reflects how optimistic or pessimistic people feel about the overall state of the economy and their own personal financial situation. In 2025, this critical measure has been making headlines due to significant declines, raising concerns among economists, policymakers, and households alike.
At its core, consumer confidence gauges the willingness of consumers to spend money on goods and services. When individuals feel positive about their current and future prospects, they are more likely to make purchases, from daily essentials to major investments like homes and cars. In contrast, falling confidence can lead to reduced spending, which can then slow economic growth. Economists watch trends in this indicator closely, as shifts can signal changes ahead for the broader economy.
In April 2025, consumer confidence in the United States dropped for the fifth consecutive month, hitting the lowest levels seen since the onset of the COVID-19 pandemic. According to a report from AP News, the Conference Board's consumer confidence index fell nearly 8 points to a score of 86. This figure suggests that more Americans are anxious about their financial futures, largely due to rising tariffs and fears of a potential recession.
Similarly, a CNBC analysis highlighted that both current sentiment and future outlook among consumers are now at their lowest points in more than a decade. The decline has been particularly steep among higher-income households and people aged 35 to 55.
A decline in consumer confidence is more than just a number—it's a signal. When individuals feel uncertain or worried, they tend to tighten their budgets. Large purchases are postponed and discretionary spending drops. With nearly two-thirds of U.S. economic output tied to consumer activity, these changes have ripple effects.
Economists like Carl Weinberg note that, "Rattled consumers spend less than confident consumers. If confidence sags and consumers retrench, growth will go down."
Several factors have contributed to the rapid drop in consumer confidence this year:
For further insights into how tariff concerns are shaping economic sentiment, visit U.S. News' coverage of public reactions as the president marks 100 days in office.
A storied connection exists between consumer confidence and broader economic trends. When optimism slips, sectors such as housing, auto sales, and travel often see immediate declines. This spring, fewer Americans stated intentions to make large purchases or travel abroad. Businesses, in response, may hold off on hiring and investment plans.
If confidence continues to deteriorate, the U.S. economy could face slower growth, or even slide toward a recession.
Consumer confidence provides a window into the mindset of households. As 2025 unfolds, the economic mood will continue to shape spending patterns, business decisions, and policy debates. By understanding its drivers and impacts, consumers and businesses can better prepare for changes ahead. Monitoring updates from reputable sources will be crucial for anyone tracking the health of the economy this year.