Source: Economics Group of Wells Fargo Bank, N.A.
Summary
February brought the biggest drop in consumer confidence since 2021 as anxiety about the outlook for the broader economy manifested in a more-than nine point drop in the forward-looking expectation index, which now sits at an eight-month low and is just 7.3 points from its cycle low in 2022.
Consumer Confidence Shaken as Tariff Talk Fuels Inflation Expectations
The Conference Board’s measure of consumer confidence corroborated a theme evident in the separately reported sentiment survey from the University of Michigan: consumers are apprehensive. The headline consumer confidence index fell to an eight-month low of 98.3 and the accompanying text in the release noted “a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019.”
As recently as January, prospects for household wealth were bright, but measures of both current and future financial situation were less positive in February. While the official release noted that “comments on the current Administration and its policies dominated the responses” not all the deterioration in confidence is due to the rapid-fire changes being implemented by the new administration.