American consumer confidence has taken a sharp dive, hitting its lowest level since the onset of the COVID-19 pandemic, according to recent reports. The Conference Board, a non-profit research organization, announced that its consumer confidence index fell by 7.9 points in April to 86, a figure not seen since May 2020.
This marks the fifth consecutive month of decline, signaling growing unease among Americans about the state of the economy. Nearly one-third of consumers anticipate a slowdown in hiring over the coming months, a sentiment that mirrors the pessimism during the Great Recession in April 2009.
The decline in confidence is attributed to several factors, including rising concerns over tariffs and increasing prices. Reports indicate that many Americans expect prices to climb due to widespread tariffs, contributing to fears of a potential recession. About half of the population is worried about an economic downturn, according to a survey by The Associated Press-NORC Center.
“Rattled consumers spend less than confident consumers,” said Carl Weinberg, chief economist at High Frequency Economics. “If confidence sags and consumers retrench, growth will go down.”
Short-term expectations for personal income, business conditions, and the job market have also plummeted. The Conference Board’s measure of these expectations dropped by 12.5 points to 54.4, the lowest in over 13 years.
The decline in consumer confidence has significant implications for the economy, as consumer spending drives a substantial portion of economic activity. As uncertainty grows, there is concern that reduced spending could slow down economic recovery efforts.
Analysts are watching closely to see how these trends will impact not only the US economy but also have ripple effects globally, potentially affecting markets and economies around the world.
