Consumer Sentiment Hits Lowest Since Trump Tariffs Began/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. consumer confidence slipped sharply in December, reaching its lowest level since the launch of Trump’s tariffs in April. The Conference Board’s monthly index showed declines in sentiment over jobs, inflation, and future expectations. While economic growth remains strong, consumer unease may signal weakening spending in the coming months.
Consumer Confidence and Tariff Effects Quick Looks
- U.S. consumer confidence fell to 89.1 in December, the fifth consecutive monthly decline.
- This is the lowest reading since April, when Trump implemented broad tariffs.
- Americans remain deeply concerned about inflation and rising costs.
- The expectations index held steady at 70.7 — still well below the 80-point recession threshold.
- Current economic conditions index plunged 9.5 points to 116.8.
- Fewer Americans reported jobs as “plentiful” and more say they are “hard to get.”
- The labor market is stagnating, with only modest job gains and rising unemployment.
- Powell notes downward revisions to job creation are likely.
- While current financial sentiment is negative, optimism for future finances is rising.
- Q3 GDP grew 4.3%, but slowdown expected in Q4 due to consumer pullback and government shutdown.
Deep Look: Consumer Confidence Sinks to Pre-Tariff Levels as Americans Worry About Inflation, Jobs, and Economic Uncertainty
Consumer confidence across the United States took a substantial hit in December, falling to its lowest point since President Donald Trump’s tariffs were introduced earlier this year. As concerns over persistent inflation and weakening labor conditions mount, Americans are showing signs of economic pessimism heading into 2026.
Confidence Index Nears April Lows
According to new data released Tuesday by the Conference Board, the consumer confidence index declined by 3.8 points, landing at 89.1 for December. This marks the fifth consecutive monthly drop and closely mirrors the 85.7 figure recorded in April when the administration launched sweeping tariffs on major U.S. trade partners.
November’s figure was revised upward to 92.9, but the ongoing downward trend highlights increasing unease among consumers about the direction of the economy.
Tariffs, Inflation, and Political Doubts Shake Sentiment
Write-in responses from survey participants underscored inflation and tariffs as top concerns. Many Americans remain skeptical of President Trump’s repeated claims that inflation is exaggerated, particularly as everyday costs continue rising. Despite Trump labeling inflation “a hoax,” consumer perceptions suggest otherwise, with prices for essentials continuing to rise amid international trade tensions and import taxes.
Expectations vs. Reality
The Expectations Index, which measures short-term consumer sentiment about income, employment, and business conditions, remained flat at 70.7. Though unchanged from November, the number still falls well below the 80-point recession warning level — a milestone it hasn’t crossed in 11 months.
Meanwhile, consumers’ perception of the current economic climate worsened notably. The Present Situation Index dropped by 9.5 points to 116.8, signaling growing dissatisfaction with ongoing job and income realities.
Job Market: A Low Hire, Low Fire Economy
Public confidence in the labor market also dipped. The share of respondents who viewed jobs as “plentiful” dropped to 26.7%, down from 28.2% in November. Simultaneously, the number of Americans who said jobs were “hard to get” rose from 20.1% to 20.8%.
This aligns with government employment data released last week, which showed that while the U.S. economy added a respectable 64,000 jobs in November, it lost 105,000 in October. The national unemployment rate climbed to 4.6% — the highest level seen since 2021.
Economists describe the labor market as being caught in a “low hire, low fire” limbo, with businesses unwilling to expand or downsize dramatically due to uncertainty stemming from the impact of tariffs and persistently high interest rates.
Federal Reserve Chair Jerome Powell recently remarked that monthly job creation — which averaged 35,000 since March — may be overestimated and could see downward revisions in coming months. That’s nearly half the pace of hiring seen in the year leading up to March 2025, when the average was 71,000 per month.
Household Finances and Recession Odds
The December consumer confidence survey also reveals shifting personal financial sentiments. For the first time in nearly four years, the number of Americans reporting that their family’s current financial status is negative exceeded those who said it was positive.
Interestingly, while current conditions reflect gloom, respondents expressed a surprising level of optimism about the future. Expectations regarding their financial situation in the year ahead were the most upbeat since January — possibly due to hopes that tariffs will ease, interest rates will fall, or inflation will stabilize.
Additionally, despite multiple warning signs in consumer data, the proportion of respondents who believe a recession is unlikely in the next 12 months has increased, showing a complex mix of anxiety and hope among American households.
Economic Growth vs. Consumer Weakness
In a potentially contradictory data point, the U.S. government on Tuesday also reported that the economy grew at an annualized rate of 4.3% in the third quarter of 2025. While this robust growth reflects strong consumer activity and exports earlier in the year, analysts expect that the final quarter may show a significant slowdown.
Factors contributing to this expected dip include the government shutdown that disrupted federal operations in November and early December, as well as early indicators of a pullback in consumer spending during the holidays.
With inflation, tariffs, job market instability, and political uncertainty clouding the economic picture, analysts warn that the first quarter of 2026 may be critical in determining whether the U.S. can avoid a recession.
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