Consumer confidence drops amid inflation and tariffs worry

Consumer confidence dropped sharply in February, with the Conference Board’s index falling 7% to 98.3, the lowest since June 2024. It is also the largest monthly decline since August 2021.

The Conference Board survey shows consumers grew more pessimistic about the country’s economic outlook, fears over inflation, future business conditions, income and job prospects.

Inflation expectations surged to 6%, up from 5.2% in January, fueled by rising household costs and concerns over import tariffs impacting the prices of goods.

President Donald Trump confirmed tariffs on Canada and Mexico will proceed in March, heightening inflation fears.

Stocks briefly dipped, and Treasury yields slid, with the 10-year yield falling to 4.29%.

The Expectations Index fell to 72.9, a level consistent with recession risks. However, some optimism remained, as 19.6% of consumers still rated conditions as “good.”