The Blubber

U.S. consumer confidence continued its steep decline in 2025, with Americans’ outlook on their financial futures falling to a 12-year low amid mounting concerns over inflation and tariffs.

The Conference Board reported Tuesday that its consumer confidence index dropped by 7.2 points in March to 92.9—the fourth consecutive monthly decline and the lowest level since January 2021. The reading fell short of analysts’ expectations of 94.5, according to a FactSet survey.

The group’s index measuring short-term expectations for income, business conditions, and the job market fell even more sharply—down 9.6 points to 65.2. That’s the weakest reading since 2013 and well below the 80-point threshold that the Conference Board says may signal a potential recession.

The share of Americans anticipating a recession remained at its highest level in nine months, the Board noted.

“Consumers’ optimism about future income—which had held up quite strongly in the past few months—largely vanished,” said Stephanie Guichard, senior economist at The Conference Board. “This suggests that concerns about the economy and labor market are beginning to affect how people view their own financial situations.”

The Trump administration has largely downplayed the dip in sentiment, arguing that consumer confidence doesn’t necessarily reflect broader economic performance. It's a stance similar to that of officials under former President Joe Biden, who also dismissed low confidence readings during periods of strong growth and high inflation.

“I just don’t think there’s been a very strong correlation between the confidence data and actual consumer spending in recent years,” Stephen Miran, chairman of the Council of Economic Advisers, said on CNBC Tuesday. “You go out in the street—people are living their lives, they’re getting their paychecks, they’re spending their paychecks, the economy is marching ahead.”

Still, some of the country’s largest retailers are offering a more cautious perspective based on shifts in consumer behavior.

Walmart has benefitted as Americans hunt for bargains in response to higher prices, but late last month the retail giant cut its profit forecast for the year. Its sales outlook was similarly conservative—and notably, it excluded the potential impact of new tariffs in its 2025 projections.

Target, meanwhile, saw a dip in sales and profits during the key holiday quarter and warned of “meaningful pressure” on earnings in early 2025. The company cited tariffs on goods from Mexico, Canada, and China as a major factor.