US Consumer Confidence Hits 5-Year Low as Tariff Fears Grow- American consumers are losing faith in the economy at a rapid pace. According to a new report from The Conference Board, US consumer confidence dropped sharply in April, reaching its lowest level in five years. The latest consumer confidence index fell by 7.9 points to 86, a number not seen since May 2020—right in the early months of the COVID-19 pandemic.
This is the fifth straight month of decline, showing a clear trend that Americans are growing more anxious about where the economy is headed. Much of that fear stems from the impact of widespread tariffs, especially those imposed on Chinese goods and key imports like steel and cars.
These moves have sparked fears of rising prices, and that’s clearly weighing on people’s minds. According to the AP-NORC Center, about half of Americans now worry the economy could slip into a recession. That concern is starting to show up in how people think about jobs, spending, and income.
A specific part of the report—covering short-term expectations for income, business, and job conditions—fell even more sharply. That measure plunged 12.5 points to 54.4, the lowest in over 13 years. Economists generally see any reading below 80 as a sign that a recession could be coming.
The full picture will become clearer soon. On Wednesday, the government will release its official report on economic growth in the first quarter, and many economists expect it to show a sharp slowdown in consumer spending—especially after strong holiday sales last winter.
Another key update will come Friday, when the Labor Department releases hiring and unemployment data. While job gains are still expected, some analysts are warning that hiring could drop significantly. If that happens, it could further shake consumer confidence and spending.
Spending on services is also falling. The number of Americans planning an overseas vacation in the next six months dropped to 16.4%, down from 24.1% in December. And one of the biggest drops was in dining out, with the Conference Board saying it saw one of the largest declines on record in April.
People earning more than $125,000 and those aged 35 to 55 reported the steepest drops in confidence, showing that economic concerns are hitting across income levels—not just lower-income households.
A: Americans are worried about rising prices from new tariffs and a possible recession.
Q: How do tariffs affect US consumer confidence?
A: Tariffs raise prices on goods, making consumers feel less secure about spending.
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Why is consumer confidence falling so fast?
One of the key reasons behind this decline is concern over tariffs. The Conference Board noted that mentions of tariffs hit an all-time high in consumer survey responses. President Donald Trump has recently imposed a 10% tariff on nearly all imports, along with a massive 145% tariff on most Chinese goods. Separate tariffs have also been placed on steel, aluminum, and cars.These moves have sparked fears of rising prices, and that’s clearly weighing on people’s minds. According to the AP-NORC Center, about half of Americans now worry the economy could slip into a recession. That concern is starting to show up in how people think about jobs, spending, and income.
A specific part of the report—covering short-term expectations for income, business, and job conditions—fell even more sharply. That measure plunged 12.5 points to 54.4, the lowest in over 13 years. Economists generally see any reading below 80 as a sign that a recession could be coming.
What does this mean for jobs and the broader economy?
There’s also growing concern about the labor market. Nearly one in three Americans now expects hiring to slow down in the coming months. That’s nearly the same level seen back in April 2009, in the middle of the Great Recession.The full picture will become clearer soon. On Wednesday, the government will release its official report on economic growth in the first quarter, and many economists expect it to show a sharp slowdown in consumer spending—especially after strong holiday sales last winter.
Another key update will come Friday, when the Labor Department releases hiring and unemployment data. While job gains are still expected, some analysts are warning that hiring could drop significantly. If that happens, it could further shake consumer confidence and spending.
How are people changing their spending habits?
Consumers aren’t just worried—they’re starting to act on those concerns. Fewer people are planning to make major purchases like homes or cars. Rising mortgage rates and high prices have already slowed down home sales this spring.Spending on services is also falling. The number of Americans planning an overseas vacation in the next six months dropped to 16.4%, down from 24.1% in December. And one of the biggest drops was in dining out, with the Conference Board saying it saw one of the largest declines on record in April.
People earning more than $125,000 and those aged 35 to 55 reported the steepest drops in confidence, showing that economic concerns are hitting across income levels—not just lower-income households.
How are financial markets reacting to the consumer outlook?
The dip in confidence may also be tied to recent market volatility. Stock and bond prices swung sharply earlier this month, creating even more uncertainty. Although markets have rebounded slightly, the numbers remain down for the year:- S&P 500 is down 6%
- Dow Jones has dropped 5%
- Nasdaq is off by 10% in 2025
What’s next for the US economy?
Economists warn that if this loss of confidence continues, it could drag down overall economic growth. As Carl Weinberg, chief economist at High Frequency Economics, said: “Rattled consumers spend less than confident consumers. If confidence sags and consumers retrench, growth will go down.”FAQs:
Q: Why is US consumer confidence dropping in 2025?A: Americans are worried about rising prices from new tariffs and a possible recession.
Q: How do tariffs affect US consumer confidence?
A: Tariffs raise prices on goods, making consumers feel less secure about spending.
