US consumer confidence drops by most since 2021 on outlook

U.S. consumer confidence fell this month by the most since August 2021 on concerns about the outlook for the broader economy, adding to evidence that uncertainty over the Trump administration’s policies is weighing on households.

The Conference Board’s gauge of confidence decreased 7 points in February to 98.3, the third straight decline, data released Tuesday showed. The median estimate in a Bloomberg survey of economists called for a reading of 102.5.

A measure of expectations for the next six months also fell by the most in 3½ years, while a gauge of present conditions declined more modestly.

The drop in confidence was broad across age groups and incomes. Consumers were more pessimistic about current and future labor-market conditions, as well as the outlook for incomes and business conditions. Perceptions of present and future financial situations worsened, and the share of respondents expecting a recession in the next year rose to a nine-month high.

Tuesday’s report reinforces other surveys that show consumer and business sentiment is waning after an initial surge of optimism in the wake of Donald Trump’s election victory. Households and companies now appear more wary of higher prices due to tariffs, especially as inflation pressures seem to be intensifying again and the labor market gradually cools.

Inflation expectations over the coming year increased to the highest since May 2023. U.S. consumers’ long-term inflation expectations in a separate report from the University of Michigan released last week rose to the highest level in almost three decades. Federal Reserve officials including Chair Jerome Powell have signaled they’re keeping interest rates steady until progress on inflation resumes.