On Feb. 25, the Conference Board released the February 2025 Consumer Confidence Index. The index slipped to 98.3, which is the lowest reading since June 2024 and the largest monthly drop since August 2021.

“This is the third consecutive month-on-month decline, bringing the Index to the bottom of the range that has prevailed since 2022,” said Stephanie Guichard, senior economist, global indicators at The Conference Board. “Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a 10-month high.”

Decreased confidence was reported across all age groups, but it was the lowest among consumers between 35 and 55 years old (Older millennials and Gen Xers). The confidence decline was also a common theme throughout most income groups, except for households earning less than $15,000 and between $100,000–125,000 annually.

The proportion of consumers anticipating a recession over the next 12 months increased to a nine-month high. Over half of consumers (51.7 percent) expected higher interest rates over the next 12 months. The share of consumers expecting lower interest rates dropped to 24 percent.

Potential future impact

Purchasing plans for homes—on a six-month moving average basis—continued to recover. However, buying plans for cars and big-ticket items were down, with notable declines for TVs and electronics.

Consumers’ priorities for potential purchasing of additional services slightly shifted toward personal and health care, as well as movies and live entertainment. Streaming, travel and vacation plans were identified as a lower priority.

CNBC reported that economists are worried recent tariffs could spark another round of inflation.

“We should expect some short-term behavioral shifts within the consumer,” said Jeffrey Roach, chief U.S. economist at LPL Financial. “Consumers are increasingly nervous about the unknown impacts from potential tariffs and could pull forward consumer demand as they anticipate higher prices for imports in the near future.”