Consumer confidence in the United States fell sharply for the fifth consecutive month in April, dropping to levels last seen at the onset of the COVID-19 pandemic. The Conference Board’s Consumer Confidence Index® declined by 7.9 points to 86.0 (1985=100), marking its lowest reading since May 2020.
The decline was driven primarily by a sharp deterioration in consumers’ expectations for the future. The Expectations Index, which gauges consumers’ short-term outlook for income, business, and labor market conditions, plunged 12.5 points to 54.4-its lowest level since October 2011 and well below the threshold of 80 that typically signals a recession ahead.
“The decline was largely driven by consumers’ expectations. The three expectation components—business conditions, employment prospects, and future income—all deteriorated sharply, reflecting pervasive pessimism about the future,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. “Notably, the share of consumers expecting fewer jobs in the next six months (32.1%) was nearly as high as in April 2009, in the middle of the Great Recession. In addition, expectations about future income prospects turned clearly negative for the first time in five years, suggesting that concerns about the economy have now spread to consumers worrying about their own personal situations. However, consumers’ views of the present have held up, containing the overall decline in the Index.”
While consumers’ assessment of current business conditions remained relatively positive, their views on the labor market weakened in April. The Present Situation Index edged down by 0.9 points to 133.5. This resilience in current conditions helped contain the overall decline in the headline index, but the sharp drop in expectations signals growing concern about the road ahead.
April’s plunge in confidence was broad-based, affecting all age groups and most income brackets. The steepest declines were recorded among consumers aged 35 to 55 and those in households earning more than $125,000 annually. The drop in confidence was also consistent across political affiliations.
Consumers cited tariffs as a top concern, with mentions reaching an all-time high in April. Many respondents explicitly linked tariffs to rising prices and negative economic impacts. Inflation and high prices remained central to consumer worries, though some noted declines in gas and food prices. Additionally, heightened financial market volatility pushed nearly half of respondents (48.5%) to expect stock prices to decline over the next year-the highest share since October 2011. Average 12-month inflation expectations climbed to 7%, the highest since November 2022.
The proportion of consumers anticipating a recession in the next 12 months rose to a two-year high. Purchasing plans for homes, cars, and vacations declined on a six-month moving average basis, and intentions to buy big-ticket items such as appliances and electronics also pulled back in April. Notably, plans to spend more on dining out registered one of the largest month-on-month declines on record.
