Americans’ confidence in the economy dropped for the fifth month in a row, reaching the lowest point since the start of the COVID-19 pandemic, as concerns over the effects of tariffs weighed heavily on people’s minds.
The Conference Board reported on Tuesday that its consumer confidence index fell 7.9 points in April, dropping to 86. This is the lowest level since May 2020. Almost one-third of consumers expect job growth to slow in the coming months, which is similar to the situation in April 2009, during the Great Recession.
The numbers show that Americans’ feelings about the economy are getting worse, as many believe prices will rise because of the tariffs imposed by President Donald Trump. About half of Americans are also worried that a recession could be coming, according to a survey by The Associated Press-NORC Center.
“Rattled consumers spend less than confident consumers,” said Carl Weinberg, chief economist at High Frequency Economics, in an email. “If confidence sags and consumers retrench, growth will go down.”
A measure of Americans’ short-term expectations about their income, business conditions, and the job market fell 12.5 points to 54.4, which is the lowest level in over 13 years. This number is well below 80, which usually signals a recession is on the way.
How this negative mood will affect spending, hiring, and economic growth will become clearer in the next few weeks. On Wednesday, the government will report on U.S. economic growth for the first three months of the year, and economists expect a slowdown as Americans cut back on spending after a strong winter holiday shopping season.
On Friday, the Labor Department will release its latest hiring and unemployment report. Economists expect job gains to remain steady, though some predict that the report could show a sharp decrease in hiring.
A board on the trading floor of the NYSEThe significant drop in consumer confidence likely reflects the recent ups and downs in stock and bond prices that shook financial markets earlier this month. While all age groups and most income groups reported lower confidence, the biggest drop came from households making more than $125,000 and consumers aged 35 to 55.
Even though major U.S. stock markets have bounced back over the past week, the S&P 500 is still down 6% for the year, and the Dow Jones has lost 5%. The Nasdaq, which is focused on growth stocks, is down 10% in 2025.
The Conference Board said that mentions of tariffs in consumer responses reached an all-time high this month, with tariffs being a major concern. Trump has imposed a 10% tariff on nearly all imports, as well as a 145% tariff on most goods from China. He has also imposed separate import taxes on steel, aluminum, and cars.
More Americans are now worried that the economy could slip into a recession, with the number of consumers expecting a downturn in the next 12 months reaching a two-year high.
Fewer consumers said they plan to buy a home or car in the next six months. Sales of existing U.S. homes slowed last month, marking a weak start to the spring homebuying season, as high mortgage rates and rising prices discouraged potential buyers.
Americans also said they would spend less on services. The number of people planning to take an overseas vacation in the next six months dropped to 16.4%, down from 24.1% in December. The percentage of consumers planning to spend more on dining out fell sharply in April, the Conference Board said.
