Consumer Confidence Plummets in February as Inflation and Tariffs Weigh on Americans

Sharpest Drop Since 2021 Amid Inflation Concerns

Consumer confidence took a sharp downturn in February, marking the steepest one-month decline since August 2021, according to a report released Tuesday by the Conference Board. The drop reflects mounting concerns over persistent inflation and the potential economic impact of new tariffs.

Americans are particularly anxious about rising prices, with the outlook for inflation a year from now surging to 6%—double the current rate. Among the biggest concerns is the rising cost of essential goods, including eggs, which saw prices jump more than 15% in January due to the ongoing avian flu outbreak affecting the nation’s poultry supply. In response, Denny’s restaurants have joined Waffle House in implementing surcharges on menu items containing eggs.

Job Market Confidence Declines as Government Job Cuts Loom

Beyond inflation worries, consumers are also growing more pessimistic about the job market. The Conference Board’s expectations index—which measures confidence in future employment, income, and business conditions—dropped by more than nine points in February to 72.9. Readings below 80 are typically seen as a warning sign for a potential recession.

This decline comes as the Trump administration moves to cut thousands of federal government jobs, raising uncertainty among workers. The impact of these reductions could extend beyond government employees, affecting industries reliant on federal contracts.

Tariffs Add Another Layer of Economic Uncertainty

The Conference Board, a nonpartisan economic think tank, noted that consumer concerns about tariffs have returned to levels not seen since 2019. “This increase likely reflects a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs,” said Conference Board economist Stephanie Guichard.

President Trump has already imposed a 10% tariff on Chinese imports and is now threatening additional taxes, including a 25% levy on goods from Canada and Mexico. These tariffs could take effect as early as next week.

Potential Impact on Grocery Prices

The administration is also considering new taxes on imported steel and aluminum, which economists warn could further drive up grocery prices. Food costs have already been climbing, and additional tariffs on essential materials may push prices even higher for American consumers.

As inflation and trade policy uncertainties mount, experts warn that consumer confidence could remain shaky in the months ahead, potentially impacting spending and economic growth.

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