Consumer Confidence in US 2025
The landscape of consumer confidence in the United States throughout 2025 presents a complex picture marked by significant volatility and persistent concerns about economic stability. American consumers have navigated a year characterized by declining confidence levels, reaching points not seen since the COVID-19 pandemic onset. The Consumer Confidence Index (CCI) measured by The Conference Board and the Consumer Sentiment Index tracked by the University of Michigan have both captured this downward trajectory, reflecting widespread apprehension about inflation, employment prospects, and overall economic conditions.
Throughout 2025, consumer attitudes have been heavily influenced by a constellation of factors including tariff policies, government shutdowns, inflation expectations, and labor market uncertainties. The year began with confidence at 104.1 in January but steadily eroded, hitting a low of 86.0 in April before experiencing partial rebounds. By December, the index stood at 89.1, demonstrating the sustained pessimism that has characterized the American consumer psyche throughout the year. These statistical measurements serve as critical economic indicators, as consumer spending accounts for approximately 70 percent of U.S. GDP, making consumer confidence a vital barometer for economic health and future spending patterns.
Latest Consumer Confidence Statistics and Interesting Facts in the US 2025
| Key Consumer Confidence Facts | 2025 Data |
|---|---|
| Conference Board Consumer Confidence Index (December 2025) | 89.1 |
| University of Michigan Consumer Sentiment (December 2025) | 52.9 |
| Lowest Consumer Confidence Point in 2025 | 86.0 (April 2025) |
| Highest Consumer Confidence Point in 2025 | 104.1 (January 2025) |
| Expectations Index (December 2025) | 70.7 |
| Present Situation Index (December 2025) | 116.8 |
| Months Expectations Index Below 80 (Recession Signal) | 11 consecutive months |
| Year-Ahead Inflation Expectations (December 2025) | 4.2% |
| Long-Run Inflation Expectations (December 2025) | 3.2% |
| Consumers Expecting Unemployment to Rise | 63% |
| Peak 12-Month Inflation Expectations in 2025 | 7.0% (April 2025) |
| Consumer Sentiment Decline from December 2024 | Nearly 30% |
Data Source: The Conference Board Consumer Confidence Survey® and University of Michigan Surveys of Consumers
The data reveals troubling trends in consumer psychology throughout 2025. The Conference Board Consumer Confidence Index plummeted from its January peak of 104.1 to a year low of 86.0 in April, representing a decline not witnessed since the COVID-19 pandemic’s early days. Most concerning is that the Expectations Index has remained below the critical 80 threshold for 11 consecutive months as of December, a level that historically signals recession within the next year. Meanwhile, the University of Michigan Consumer Sentiment Index painted an even grimmer picture, with December’s reading of 52.9 representing one of the lowest measurements on record, second only to June 2022.
Consumer inflation expectations spiked dramatically, reaching 7.0 percent in April before moderating to 4.2 percent by December. This roller coaster of expectations was driven primarily by concerns about tariff policies, rising costs of essential household items, and uncertainty about employment prospects. The Present Situation Index declined from robust levels in early 2025 to 116.8 in December, while a significant 63 percent of consumers anticipated continued unemployment increases. These statistics collectively paint a portrait of American consumers caught between persistent inflation worries and growing anxieties about labor market stability, fundamentally reshaping spending behaviors and economic outlooks heading into 2026.
Monthly Consumer Confidence Index Trends in the US 2025
| Month | Consumer Confidence Index (1985=100) | Present Situation Index | Expectations Index | Monthly Change |
|---|---|---|---|---|
| January 2025 | 104.1 | 134.3 | 83.9 | -5.4 points |
| February 2025 | 98.3 | 136.5 | 72.9 | -7.0 points |
| March 2025 | 92.9 | 134.5 | 65.2 | -7.2 points |
| April 2025 | 86.0 | 133.5 | 54.4 | -7.9 points |
| May 2025 | 98.0 | 135.9 | 72.8 | +12.3 points |
| June 2025 | 97.4 (est.) | 131.2 | 74.8 | -0.6 points |
| July 2025 | 98.5 (est.) | 133.6 | 78.2 | +1.1 points |
| August 2025 | 97.4 | 131.2 (est.) | 74.8 (est.) | -1.3 points |
| September 2025 | 95.6 | 127.5 (est.) | 73.6 (est.) | -1.8 points |
| October 2025 | 94.6 | 129.3 | 71.5 | -1.0 point |
| November 2025 | 88.7 (preliminary) | 126.9 | 63.2 | -6.8 points |
| December 2025 | 89.1 | 116.8 | 70.7 | -3.8 points |
Data Source: The Conference Board Consumer Confidence Survey®
The monthly progression of consumer confidence throughout 2025 reveals a year defined by dramatic swings and sustained pessimism. The year opened with the index at 104.1 in January, already reflecting concerns from consumers about economic conditions. From there, confidence entered a steep five-month decline, shedding 5.4 points in January, 7.0 points in February, 7.2 points in March, and culminating in a devastating 7.9-point drop in April that pushed the index to its annual nadir of 86.0. This April reading represented the lowest level since the COVID-19 pandemic began, reflecting pervasive anxiety about tariff policies, stock market volatility, and inflation expectations that surged to 7.0 percent.
May brought temporary relief with a remarkable 12.3-point rebound to 98.0, driven partly by the announcement of a pause on certain Chinese tariffs on May 12. However, this optimism proved short-lived as confidence resumed its decline through the remainder of the year. The Expectations Index tells an even more dramatic story, plunging from 83.9 in January to a 12-year low of 54.4 in April, well below the critical 80 threshold that historically signals recession. While the index recovered slightly to 72.8 in May, it remained persistently below 80 for all 11 months from February through December, matching the longest such streak since 2008. The Present Situation Index also deteriorated significantly, dropping from 134.3 in January to 116.8 by December, a decline of 9.5 points in December alone, indicating that consumers viewed current business and labor market conditions with increasing pessimism as the year progressed.
Consumer Confidence by Age Demographics in the US 2025
| Age Group | Confidence Level (April 2025) | Confidence Level (December 2025) | Change | Primary Concerns |
|---|---|---|---|---|
| Under 35 years | Lower than average | Slight improvement | +2-3 points | Employment prospects, student debt, housing affordability |
| 35-55 years | Sharpest decline | Below average | -8 to -10 points | Job security, mortgage rates, family financial stability |
| Over 55 years | Below average | Continued decline | -6 to -8 points | Retirement savings, healthcare costs, inflation |
| All Age Groups | 86.0 (Overall Index) | 89.1 (Overall Index) | +3.1 points | Inflation, tariffs, labor market conditions |
Data Source: The Conference Board Consumer Confidence Survey®
Age-based analysis of consumer confidence in 2025 reveals distinct patterns of concern and resilience across different generational cohorts. The 35-55 age demographic experienced the sharpest declines throughout the year, particularly during the spring months when confidence was plummeting. This middle-age group, often at peak earning years while managing substantial financial obligations including mortgages, children’s education, and family expenses, bore the brunt of economic anxieties. By April, when overall confidence hit 86.0, this demographic registered the steepest decline, falling 8 to 10 points below their January levels. Their concerns centered heavily on job security amid reports of hiring freezes, rising mortgage rates that threatened housing affordability, and general uncertainty about maintaining their family’s financial stability.
Younger consumers under 35 years demonstrated slightly more resilience, particularly toward the end of 2025. While they started from a relatively pessimistic position, December data showed 13 percent improvement in their expectations for personal finances, especially among younger consumers who expressed growing optimism about future income prospects despite challenging current conditions. Their primary concerns focused on employment opportunities in an increasingly uncertain labor market, managing student debt burdens, and the seeming impossibility of homeownership with elevated prices and mortgage rates. Meanwhile, consumers over 55 years maintained persistent pessimism throughout the year, with confidence continuing to decline through December. This older demographic grappled with concerns about retirement savings being eroded by inflation, escalating healthcare costs, and the impact of market volatility on their investment portfolios. The broad-based nature of declining confidence across all age groups underscores how pervasive economic concerns became in 2025, with only marginal improvements observed among younger consumers late in the year.
Consumer Confidence by Income Level in the US 2025
| Income Level | Confidence Trend | December 2025 Status | Key Characteristics |
|---|---|---|---|
| Less than $15,000 | Consistently lowest | Least optimistic | Severe financial strain, inability to absorb price increases |
| $15,000-$50,000 | Significant decline | Below average | Budget constraints, reduced discretionary spending |
| $50,000-$75,000 | Notable pessimism | Below average | Middle-income squeeze, inflation impact |
| $75,000-$100,000 | Moderate decline | Near average | Managing but cautious spending behavior |
| $100,000-$125,000 | Mixed signals | Slight improvement | Some resilience, selective spending cuts |
| Over $125,000 | Most resilient | Above average | Only group showing stability, stock market sensitivity |
Data Source: The Conference Board Consumer Confidence Survey®
Income-based stratification of consumer confidence in 2025 reveals stark disparities in how different economic classes weathered the year’s challenges. Consumers earning less than $15,000 annually consistently registered as the least optimistic group throughout the entire year, a pattern that persisted even as December approached. This lowest-income cohort faced the most severe financial pressures, with limited ability to absorb rising prices for essentials like food, housing, and energy. Their confidence never approached average levels, reflecting the harsh reality that inflation and cost-of-living increases hit hardest those with the least financial buffer. Middle-income households earning between $50,000 and $100,000 experienced what economists termed the “middle-income squeeze,” where their earnings failed to keep pace with inflation, forcing difficult choices about spending priorities and delayed major purchases.
The highest-income households, those earning over $125,000 annually, demonstrated the most resilience throughout 2025’s turbulence. April marked the only period where this affluent demographic experienced significant confidence decline alongside other income groups, suggesting that even the wealthy felt impacts during the year’s darkest economic moment. However, by May and beyond, higher-income consumers showed greater stability compared to their lower-earning counterparts. This resilience stemmed partly from their substantial exposure to equity markets, which recovered after May’s trade deal announcement, improving their net worth perceptions and future outlooks. Notably, the $100,000-$125,000 income bracket showed mixed signals, maintaining relative stability in some months while declining in others. December data indicated that lower-income consumers posted modest gains in sentiment, though from historically depressed levels, while higher-income consumers remained relatively unchanged. The persistent gap between confidence levels across income strata highlights growing economic stratification, where inflation and economic uncertainty disproportionately burden those least equipped to handle financial shocks.
Inflation Expectations and Consumer Confidence in the US 2025
| Month | 12-Month Inflation Expectations | 5-Year Inflation Expectations | Consumer Confidence Index | Correlation |
|---|---|---|---|---|
| January 2025 | 3.3% (baseline) | 3.0% (est.) | 104.1 | Starting point |
| February 2025 | 6.0% | 3.1% (est.) | 98.3 | Rising fears |
| March 2025 | 6.2% | 3.2% (est.) | 92.9 | Peak concerns |
| April 2025 | 7.0% | 3.3% (est.) | 86.0 | Highest since November 2022 |
| May 2025 | 6.5% | 3.2% (est.) | 98.0 | Slight easing |
| June 2025 | 5.8% (est.) | 3.2% | 97.4 | Gradual decline |
| November 2025 | 4.5% | 3.4% | 88.7 | Moderating |
| December 2025 | 4.2% | 3.2% | 89.1 | Lowest in 11 months |
Data Source: University of Michigan Surveys of Consumers and The Conference Board
The relationship between inflation expectations and consumer confidence in 2025 proved inverse and powerful, with rising inflation fears directly correlating with plummeting confidence levels. The year began with relatively moderate inflation expectations of 3.3 percent in January, but concerns rapidly escalated as consumers anticipated the impact of newly implemented tariff policies. By February, 12-month inflation expectations had surged to 6.0 percent, coinciding with a 7.0-point drop in consumer confidence to 98.3. This upward trajectory in inflation fears continued through March (6.2 percent) and peaked dramatically in April at 7.0 percent, the highest reading since November 2022 when the United States was experiencing extremely high inflation. This April spike coincided with confidence hitting its annual low of 86.0, demonstrating the powerful psychological impact of inflation fears on overall consumer sentiment.
Several factors drove these elevated inflation expectations throughout 2025. Consumers expressed widespread concern about tariff policies increasing prices across various product categories, from electronics to household goods. References to “tariffs” in write-in survey responses reached all-time highs in April, with consumers explicitly mentioning fears about tariff-induced price increases. Additionally, sharp spikes in prices for essential household items, particularly eggs and other staples, heightened sensitivity to cost-of-living pressures. The 63 percent of consumers expecting unemployment to rise by December further compounded inflation worries, as the dual threat of job insecurity and rising prices created what economists termed “stagflation anxiety.” Long-run inflation expectations also rose from roughly 3.0 percent early in the year to 3.4 percent in November before moderating to 3.2 percent in December, matching January’s level but remaining elevated compared to the 2.8 percent or below readings common in 2019-2020. The gradual decline in inflation expectations from April’s peak of 7.0 percent to December’s 4.2 percent provided modest relief, though expectations remained well above the Federal Reserve’s 2 percent target and contributed to sustained pessimism about economic conditions throughout the year.
Labor Market Perceptions and Consumer Confidence in the US 2025
| Labor Market Indicator | January 2025 | April 2025 | December 2025 | Change |
|---|---|---|---|---|
| Jobs “Plentiful” | 33.0% | 32.5% (est.) | 30.8% (est.) | -2.2 percentage points |
| Jobs “Hard to Get” | 16.8% | 15.8% (est.) | 17.2% (est.) | +0.4 percentage points |
| Labor Market Differential | +16.2 points | +16.7 points (est.) | +13.6 points (est.) | -2.6 points |
| Consumers Expecting Unemployment to Rise | 55% (est.) | 60% (est.) | 63% | +8 percentage points |
| Expectations for Job Availability (6 months) | Moderately positive | Sharply negative | Cautiously negative | Significant deterioration |
| Overall Employment Sentiment | Relatively stable | Major concerns | Persistent pessimism | Sustained weakness |
Data Source: The Conference Board Consumer Confidence Survey®
Labor market perceptions underwent significant deterioration throughout 2025, emerging as one of the primary drivers of declining consumer confidence. The year began with a concerning signal in January when 33.0 percent of consumers reported jobs as “plentiful” while 16.8 percent found them “hard to get,” yielding a labor market differential of approximately +16.2 points. While still positive, this represented a substantial decline from December 2024’s more optimistic reading of 37.1 percent reporting plentiful jobs. The deterioration accelerated through spring, with consumers’ appraisals of labor market conditions declining five consecutive months from January through May. By December, the differential had weakened further to an estimated +13.6 points, reflecting growing pessimism about employment opportunities.
Most alarming was the dramatic increase in consumers expecting unemployment to rise over the coming year. Starting from approximately 55 percent in early 2025, this figure climbed steadily throughout the year, reaching 63 percent by December. This represented an 8 percentage point increase and indicated widespread belief that labor market conditions would continue worsening into 2026. Consumers expressed particular concern about hiring freezes, with many companies adopting a “no hire, no fire” stance amid uncertainty about tariff impacts and economic conditions. Write-in survey responses frequently mentioned job security concerns, with references to the labor market standing out as a frequent theme alongside inflation and tariff worries. The government shutdown spanning October 1 to November 12 further exacerbated employment anxieties, with government workers facing income uncertainty and private sector employees concerned about ripple effects. By year’s end, despite modest improvements in some sentiment measures, labor market expectations remained “aggressively pessimistic on a historical standard,” with the proportion of consumers viewing job prospects favorably well below pre-2025 levels. This sustained pessimism about employment prospects fundamentally undermined confidence even when other economic indicators showed strength, as consumers increasingly feared their own economic security regardless of broader economic performance.
Consumer Spending Patterns and Retail Sales in the US 2025
| Category | October 2025 Sales | Year-over-Year Change | Trend |
|---|---|---|---|
| Total Retail Sales | $732.6 billion | +3.5% | Flat monthly |
| Online/Nonstore Retailers | Strong growth | +9.0% | Rising significantly |
| Food Services & Drinking Places | Moderate growth | +4.1% | Steady but slowing |
| Motor Vehicles & Parts | Below December 2024 | -0.3% to -1.6% | Declining monthly |
| Electronics & Appliances | Mixed performance | +0.3% to +0.7% | Volatile |
| Building Materials & Garden | Weak performance | -1.0% to -0.9% | Declining |
| Furniture & Home Furnishing | Soft sales | -0.3% to +2.3% | Inconsistent |
| Core Retail Sales (ex-auto) | Strong | +4.0% | Resilient |
| Holiday Retail Spending (Nov-Dec) | Up from 2024 | +4.2% | Better than expected |
Data Source: U.S. Census Bureau Monthly Retail Trade Survey and Visa Consulting and Analytics
Consumer spending patterns in 2025 revealed a paradoxical situation where spending remained resilient despite historically low confidence levels. Total retail sales for October 2025 reached $732.6 billion, representing a 3.5 percent increase compared to October 2024, though the monthly change was virtually flat at 0.0 percent. The August through October 2025 period showed cumulative growth of 4.2 percent compared to the same period in 2024, demonstrating that consumers continued spending even as confidence plummeted. Online retail emerged as the dominant growth driver, with nonstore retailers posting impressive 9.0 percent year-over-year gains, reflecting an accelerating shift toward e-commerce that intensified throughout 2025.
Spending patterns clearly showed consumers prioritizing necessities and “cheap thrills” over major discretionary purchases. Food services and drinking places grew 4.1 percent year-over-year, though monthly trends showed volatility with periodic declines suggesting consumers were cutting back on dining out despite aggregate growth. The most dramatic weakness appeared in big-ticket item categories. Motor vehicle sales remained nearly 1 percent below December 2024 levels despite periodic monthly gains, as consumers deferred major purchases amid economic uncertainty and elevated prices. Building materials and garden equipment sales fell 1.0 percent during the holiday season, indicating consumers were postponing home improvement projects in favor of immediate needs and gift-giving. Furniture sales showed similar weakness, declining 0.3 percent in some months before rebounding 2.3 percent in others, suggesting highly inconsistent consumer commitment to home furnishing investments.
The holiday season (November-December 2025) ultimately exceeded expectations with 4.2 percent growth across all payment types according to Visa data. However, this growth masked significant shifts in consumer behavior. Electronics emerged as the top-performing category with 5.8 percent growth, driven by AI-enabled devices and consumers refreshing technology. Apparel and accessories rose 5.3 percent, benefiting from gift-giving priorities. Yet vacation plans “continued to spiral downward” throughout the year, with consumers curtailing travel spending in both domestic and international categories. Core retail sales (excluding autos, gas, and building materials) proved more resilient than headline numbers, rising 4.0 percent year-over-year by October, suggesting that when stripped of volatile categories, underlying consumer demand remained moderately healthy. The persistent gap between low confidence and continued spending led economists to characterize consumers as “uncertain, cautious, but smart about how they’re spending their money,” prioritizing essentials and selective discretionary purchases while aggressively cutting back on major expenditures and experiences like vacations.
Political Affiliation and Consumer Confidence in the US 2025
| Political Group | Confidence Trend | December 2025 | Key Drivers |
|---|---|---|---|
| Democrats | Continued decline | Below average | Economic policies, inflation concerns, labor market |
| Republicans | Continued decline | Below average | Government shutdown, tariff impacts, uncertainty |
| Independents | Continued decline | Below average | Bipartisan economic concerns, inflation |
| All Affiliations | Broad-based decline | 89.1 (overall) | Economic fundamentals transcending politics |
Data Source: The Conference Board Consumer Confidence Survey®
Political affiliation played a notable role in shaping consumer confidence throughout 2025, though the year was characterized by rare bipartisan pessimism about economic conditions. Unlike typical patterns where confidence diverges sharply along partisan lines based on which party holds the presidency, 2025 saw confidence falling among Democrats, Republicans, and Independents alike, particularly in the latter months of the year. December data specifically noted that “confidence continued to fall in December among all political affiliations,” indicating that economic concerns transcended political identity in an unusual display of cross-partisan agreement about deteriorating conditions.
Republicans, despite their party controlling the presidency, experienced significant confidence declines throughout 2025. The May rebound in confidence was “strongest among Republicans” following the May 12 trade deal announcement, suggesting this demographic remained most responsive to administration policy shifts. However, sustained concerns about the government shutdown spanning October 1 to November 12, ongoing tariff uncertainties, and persistent inflation eroded whatever partisan optimism existed. Write-in responses from all political groups were dominated by references to “prices and inflation, tariffs and trade, and politics,” with the administration and its policies generating both positive and negative comments across the political spectrum. Democrats maintained consistently below-average confidence throughout the year, expressing concerns about economic management and policy directions. Independents, whose views often serve as bellwethers for broader national sentiment, tracked closely with overall national trends, showing the same patterns of decline from January through April, partial May recovery, and renewed pessimism through year-end. The broad-based nature of declining confidence across all political affiliations underscored how fundamental economic concerns—inflation, employment uncertainty, cost-of-living pressures—dominated consumer psychology in 2025, overriding partisan lenses through which Americans typically view economic conditions. This political convergence in pessimism represented one of 2025’s most distinctive features, suggesting that when economic stress becomes sufficiently severe and widespread, it creates rare moments of shared concern that transcend partisan divides.
Consumer Confidence and Stock Market Expectations in the US 2025
| Period | Expecting Higher Stock Prices | Expecting Lower Stock Prices | Net Optimism | Confidence Index |
|---|---|---|---|---|
| January 2025 | 52.9% | 23.7% | +29.2 points | 104.1 |
| February 2025 | 46.8% | 32.8% | +14.0 points | 98.3 |
| March 2025 | 37.4% | 44.5% | -7.1 points | 92.9 |
| April 2025 | 37.6% | 48.5% | -10.9 points | 86.0 |
| May 2025 | 44.0% | 37.7% | +6.3 points | 98.0 |
| November 2025 | Strong positive | Lower negative | Improving | 88.7 |
| December 2025 | Most positive since Jan | Lower than Nov | Best since January | 89.1 |
Data Source: The Conference Board Consumer Confidence Survey®
Consumer expectations for stock market performance throughout 2025 exhibited dramatic volatility that closely mirrored overall confidence trends. The year opened with robust optimism, with 52.9 percent of consumers expecting higher stock prices over the coming year compared to just 23.7 percent anticipating declines, yielding a strongly positive net expectation of +29.2 points. This bullishness reflected the equity market strength that characterized late 2024 and early 2025. However, stock market expectations deteriorated precipitously alongside overall confidence through the spring months. By February, only 46.8 percent expected higher prices while 32.8 percent predicted declines, shrinking the optimism gap to +14.0 points.
March 2025 marked a historic turning point when consumers turned net negative on stock prospects for the first time since the end of 2023. Only 37.4 percent expected stock price increases while 44.5 percent anticipated declines, creating a negative net expectation of -7.1 points. This pessimism deepened in April when stock expectations hit their nadir: just 37.6 percent predicted gains while a substantial 48.5 percent expected losses, the highest share anticipating stock declines since October 2011. This -10.9 point net negative sentiment coincided with high financial market volatility and represented consumers’ deepest equity market pessimism in over a decade. The Conference Board noted that “consumers turned negative about the stock market for the first time since the end of 2023” in direct response to recent market volatility.
The May trade deal announcement catalyzed a significant recovery in stock market expectations, with the proportion expecting price increases rebounding to 44.0 percent while those anticipating declines fell to 37.7 percent, restoring a positive +6.3 point net expectation. This improvement was particularly pronounced among consumers with the largest stock holdings, who are most sensitive to equity market movements. Interestingly, by November and December, stock market expectations had recovered further, with December showing “the balance of consumers’ expectations for stock prices twelve months from now—higher minus lower—was the most positive since January 2025.” This represented the best outlook since the year began, suggesting that despite persistently low overall confidence, consumers ended 2025 with renewed optimism about equity market prospects. However, this disconnect between improved stock expectations and continued overall pessimism highlighted an important stratification: higher-income households with substantial equity holdings felt some relief from market stabilization, while lower and middle-income consumers without significant stock exposure continued facing economic pressures that confidence measures primarily reflect.
Regional Variations in Consumer Confidence in the US 2025
| Region | Relative Confidence Level | Key Economic Factors |
|---|---|---|
| Northeast | Below national average | High cost of living, real estate pressures, inflation sensitivity |
| Midwest | Mixed performance | Manufacturing concerns, agricultural impacts, tariff exposure |
| South | Near national average | Population growth, diverse economy, energy sector |
| West | Below national average | Tech sector volatility, housing affordability crisis, high costs |
| Urban Areas | More pessimistic | Concentrated cost pressures, housing crisis, inflation |
| Rural Areas | Variable | Agricultural challenges, limited economic diversity |
Data Source: The Conference Board Consumer Confidence Survey® (Regional patterns inferred from national data)
While The Conference Board’s primary Consumer Confidence Index reports national-level data, regional variations in economic conditions throughout 2025 created divergent confidence levels across different parts of the United States. Urban areas, particularly major metropolitan centers on both coasts, experienced more pronounced pessimism driven by extreme housing affordability challenges, concentrated inflation impacts on essential costs like rent and food, and greater exposure to white-collar job market uncertainties. Cities in the Northeast and West Coast regions faced particular pressures from high costs of living that intensified throughout 2025, with consumers in these areas feeling the inflation squeeze most acutely as their already-elevated baseline expenses continued climbing.
The Midwest presented a mixed picture, with some areas benefiting from lower living costs but facing headwinds from manufacturing sector concerns and agricultural challenges related to trade policies. Tariff policies announced throughout 2025 created particular anxiety in Midwest manufacturing communities dependent on global supply chains and export markets. The South generally tracked closer to national averages, benefiting from continued population in-migration, relatively lower costs of living, and economic diversity spanning energy, technology, and service sectors. However, even southern consumers faced the universal pressures of inflation and labor market uncertainty that characterized the national experience.
Rural areas across all regions confronted unique challenges including limited economic diversity, agricultural sector volatility, and concerns about access to services and opportunities. The government shutdown from October 1 to November 12 had varying regional impacts, with areas heavily dependent on federal employment or federal contracts experiencing more severe confidence declines. Coastal technology hubs saw confidence fluctuations tied to equity market volatility given the concentration of stock-compensated workers, while energy-producing regions in the South and West experienced sentiment swings correlated with oil and gas price movements. By year’s end, the broad-based nature of declining confidence suggested that while regional variations existed, fundamental economic concerns about inflation, employment, and cost-of-living pressures created a largely unified national experience of economic pessimism transcending geographic boundaries. The 89.1 December Consumer Confidence Index represented a national average that, while varying by region, indicated that no part of the country escaped the year’s economic anxieties.
Government Shutdown Impact on Consumer Confidence in the US 2025
| Shutdown Period | Duration | Confidence Impact | Recovery Pattern |
|---|---|---|---|
| October 1 – November 12, 2025 | 42 days | Significant negative effect | Partial rebound post-shutdown |
| Federal Workers Affected | Hundreds of thousands | Income uncertainty | Direct financial impact |
| Private Sector Ripple Effects | Widespread | Secondary impacts | Indirect confidence erosion |
| Government Services Disruption | Major departments | Public frustration | Administrative concerns |
| October Confidence | 94.6 | -1.0 point decline | Shutdown begins |
| November Confidence (preliminary) | 88.7 | -6.8 point plunge | During shutdown |
| Write-in References to Politics | Frequent | Heightened concerns | Policy uncertainty |
Data Source: The Conference Board Consumer Confidence Survey®
The government shutdown spanning 42 days from October 1 to November 12, 2025 emerged as a major contributor to declining consumer confidence during the fall months. This extended closure of federal operations represented one of the longest government shutdowns in recent history, affecting hundreds of thousands of federal employees who faced income uncertainty and furloughs. The October confidence reading of 94.6 already reflected consumers’ initial reactions to the shutdown’s commencement, showing a modest 1.0-point decline from September. However, the full psychological impact materialized in November when preliminary data revealed a dramatic 6.8-point plunge to 88.7, one of the largest monthly declines of the entire year outside of the spring crisis period.
The shutdown’s impact extended far beyond federal workers themselves. Private sector businesses dependent on government contracts or services experienced operational disruptions and revenue losses, creating ripple effects throughout the broader economy. Consumers expressed frustration about delayed services, from passport processing to national park closures, while business owners worried about contract payments and regulatory approvals being frozen. Write-in survey responses during October and November frequently referenced “politics” and government dysfunction, with consumers across all political affiliations expressing anger and disappointment about Washington’s inability to maintain basic governmental operations. The Conference Board noted that political references became increasingly common in consumer survey comments during this period, with the shutdown amplifying existing concerns about policy uncertainty and economic management.
The shutdown compounded existing anxieties about tariffs, inflation, and labor market conditions that had dominated consumer psychology throughout 2025. For federal employees, the shutdown created immediate financial stress as paychecks stopped or were delayed, forcing difficult decisions about paying bills and maintaining household expenses during an already economically challenging year. For the general public, the shutdown served as a vivid symbol of broader dysfunction and uncertainty, eroding confidence that policymakers could effectively address economic challenges. When the government finally reopened on November 12, confidence showed only modest recovery through December, reaching 89.1, suggesting that the damage to consumer psychology persisted even after normal operations resumed. The shutdown demonstrated how political events and policy uncertainty can translate directly into measurable confidence impacts, with government dysfunction serving as both a practical economic disruptor and a powerful psychological signal that exacerbates existing economic anxieties.
Tariff Policy Impact on Consumer Confidence in the US 2025
| Tariff Event | Timing | Consumer Response | Confidence Impact |
|---|---|---|---|
| Initial Tariff Implementation | January-March 2025 | Rising price concerns | Decline from 104.1 to 92.9 |
| Tariff Escalation | April 2025 | Peak anxiety | Plunge to 86.0 (year low) |
| Write-in “Tariff” References | April 2025 | All-time high frequency | Dominant consumer concern |
| Chinese Tariff Pause Announcement | May 12, 2025 | Immediate relief | Rebound to 98.0 (+12.3 points) |
| One-Year Inflation Expectations Peak | April 2025 | 7.0% | Highest since November 2022 |
| Tariff-Related Price Increases | Throughout 2025 | Purchasing behavior changes | Sustained pessimism |
| Goods Categories Most Affected | Electronics, household items | Delayed purchases | Reduced discretionary spending |
Data Source: The Conference Board Consumer Confidence Survey® and University of Michigan Surveys of Consumers
Tariff policies emerged as the single most dominant driver of consumer confidence volatility throughout 2025, with their psychological and economic impacts reverberating across virtually every confidence measure. The year began with implementation of significant tariff increases on imported goods, particularly from China, announced in late 2024 and taking effect in early 2025. Consumers immediately anticipated price increases across numerous product categories, from electronics and appliances to household goods and clothing. By February, 12-month inflation expectations had surged to 6.0 percent from January’s 3.3 percent, with write-in survey responses explicitly mentioning tariffs as a primary concern. The Conference Board reported that references to “tariffs” in open-ended consumer responses reached unprecedented levels, indicating widespread awareness and anxiety about trade policy impacts.
April 2025 represented the apex of tariff-related consumer anxiety. That month saw the Consumer Confidence Index crater to 86.0, its lowest point of the entire year and a level not seen since the early COVID-19 pandemic. Simultaneously, one-year inflation expectations exploded to 7.0 percent, the highest reading since November 2022 when the United States was experiencing peak post-pandemic inflation. The Conference Board explicitly noted that write-in references to tariffs hit “all-time highs” in April, with consumers expressing fears about imminent price spikes, supply chain disruptions, and economic instability. The Expectations Index plummeted to 54.4, well into territory that historically precedes recession, as consumers envisioned a future of elevated costs and reduced purchasing power driven primarily by tariff-induced price increases.
The May 12, 2025 announcement of a one-year pause on certain Chinese tariffs provided dramatic relief, triggering one of the fastest confidence rebounds on record. The index surged 12.3 points from 86.0 in April to 98.0 in May, with the improvement “strongest among Republicans” according to The Conference Board, though sentiment improved across all political affiliations. Inflation expectations moderated from 7.0 percent to approximately 6.5 percent, though remained elevated. However, the relief proved incomplete and temporary. Many tariffs remained in place, and uncertainty about their long-term status continued weighing on consumer psychology. By December, while inflation expectations had further moderated to 4.2 percent, confidence remained depressed at 89.1, nearly 15 points below January’s starting level.
The behavioral impact of tariff concerns extended beyond sentiment measurements into actual purchasing decisions. Consumers reported delaying major purchases, particularly of tariff-sensitive items like electronics, appliances, and vehicles, either hoping for price moderations or prioritizing immediate needs over discretionary spending. The sustained elevation of inflation expectations throughout the year, remaining consistently above 4 percent even in December, reflected persistent tariff-related concerns. Small business owners surveyed separately expressed elevated uncertainty about supply costs and future pricing, with tariff policy appearing as a top concern alongside labor availability. The tariff saga of 2025 demonstrated how trade policy uncertainty can rapidly translate into measurable confidence impacts, with consumers highly attuned to potential price implications and quick to adjust both their attitudes and behaviors in response to perceived threats to their purchasing power.
Housing Market Sentiment and Consumer Confidence in the US 2025
| Housing Indicator | Status | Consumer Impact |
|---|---|---|
| Home Purchase Intentions | Historically depressed | Major life decision deferrals |
| Mortgage Rate Sensitivity | Extremely high | Affordability crisis |
| Home Prices (Perception) | Still elevated | Wealth effect concerns |
| First-Time Buyer Sentiment | Highly pessimistic | Homeownership unattainable |
| Housing Affordability Index | Near record lows | Middle-class squeeze |
| Rent Burden | Increasing | Reduced discretionary income |
Data Source: The Conference Board Consumer Confidence Survey®
Housing market concerns significantly contributed to depressed consumer confidence throughout 2025, with affordability challenges reaching crisis levels for many Americans. Consumers’ plans to purchase homes “remained historically depressed” throughout the year according to Conference Board data, reflecting the combined impact of elevated home prices and mortgage rates that, despite some moderation from 2023 peaks, remained well above the 3-4 percent range common in the 2010s. The double burden of high prices and high borrowing costs effectively locked many potential buyers out of the market, particularly first-time homebuyers already struggling with student debt and limited savings. Even consumers with strong credit and stable incomes found themselves priced out of their preferred markets, creating widespread frustration about achieving or maintaining middle-class homeownership status.
The psychological impact extended beyond prospective buyers to existing homeowners and renters alike. Homeowners who had benefited from price appreciation in recent years found themselves “locked in” by low mortgage rates obtained before 2022, unable to sell and buy another property without dramatically increasing their monthly housing costs. This reduced mobility limited career opportunities and lifestyle choices, contributing to broader feelings of economic constraint. Renters faced their own challenges as elevated housing costs kept rental markets tight and expensive, with rent consuming increasingly large portions of household budgets. The Conference Board noted that housing affordability remained near historic lows, creating a sense that one of the traditional pillars of American economic security and wealth-building had become fundamentally out of reach for millions of families.
By December 2025, housing market pessimism persisted despite some modest improvements in other economic indicators. The proportion of consumers planning major household purchases remained subdued, with references to postponing home buying, renovation projects, and furniture purchases appearing frequently in qualitative survey responses. The housing affordability crisis contributed to the “middle-income squeeze” phenomenon, where families earning solid incomes still found themselves unable to afford homes in their communities or struggling to maintain their current housing situations. For younger consumers under 35, the seeming impossibility of homeownership fundamentally altered their economic outlook and life planning, contributing to their persistently pessimistic confidence readings despite some late-year improvements in other measures. The housing market’s role in the 2025 confidence crisis highlighted how when a fundamental component of economic security becomes unattainable, it undermines overall consumer optimism even when other economic indicators like employment or wages show relative strength. Housing concerns thus served as both a practical economic burden and a powerful symbol of broader economic opportunity constraints that defined consumer psychology throughout 2025.
Consumer Confidence Recovery Prospects for the US in 2026
| Factor | Current Status (Dec 2025) | 2026 Outlook | Confidence Impact |
|---|---|---|---|
| Inflation Expectations | 4.2% (one-year) | Potential moderation | Positive if sustained decline |
| Labor Market Fears | 63% expect unemployment rise | Critical uncertainty | Major downside risk |
| Tariff Policy | Partially resolved | Ongoing uncertainty | Dependent on stability |
| Expectations Index | 70.7 (below recession threshold) | Must rise above 80 | Key recovery indicator |
| Stock Market Sentiment | Most positive since January | Improving trajectory | Supports higher-income confidence |
| Government Stability | Post-shutdown recovery | Requires sustained functionality | Political confidence critical |
| Current Economic Conditions | Present Situation: 116.8 | Showing weakness | Foundation concerns |
Data Source: The Conference Board Consumer Confidence Survey®
The prospects for consumer confidence recovery in 2026 remain highly uncertain, contingent on several critical factors that could push sentiment either toward recovery or deeper pessimism. The December 2025 reading of 89.1 represents a modest improvement from November’s 88.7 but remains deeply depressed compared to the 104.1 level that opened the year, indicating that sustained recovery will require addressing fundamental concerns rather than temporary sentiment fluctuations. Most critically, the Expectations Index stood at 70.7 in December, marking 11 consecutive months below the critical 80 threshold that historically signals recession within the following year. For confidence to meaningfully recover, this forward-looking measure must rise decisively above 80 and remain there consistently, indicating that consumers genuinely believe economic conditions will improve rather than deteriorate.
Several factors offer potential pathways to recovery. Inflation expectations moderating from April’s peak of 7.0 percent to December’s 4.2 percent represents significant progress, and if this downward trajectory continues toward the Federal Reserve’s 2 percent target throughout early 2026, it could substantially ease cost-of-living anxieties that dominated 2025. The improvement in stock market expectations to their most positive levels since January suggests that at least some segments of the population are regaining optimism about wealth preservation and growth, which could support higher-income consumer spending. The resolution of the government shutdown and potential stabilization of tariff policies could reduce uncertainty that paralyzed decision-making throughout 2025, allowing consumers to plan major purchases and investments with greater confidence.
However, formidable headwinds remain that could prevent or delay confidence recovery. The fact that 63 percent of consumers expect unemployment to rise represents perhaps the single greatest threat to sentiment improvement, as job security concerns directly undermine consumer willingness to spend regardless of other economic conditions. The Present Situation Index declining to 116.8 in December, down 9.5 points in a single month, suggests that consumers perceive current economic conditions are actively deteriorating, not just holding steady at depressed levels. This combination of weak current assessments and pessimistic future expectations creates a particularly challenging foundation for recovery. Additionally, the Expectations Index remaining below 80 for nearly a full year means consumers have spent 2025 conditioning themselves to expect recession, creating psychological inertia that may persist even if objective conditions improve.
The Conference Board’s own assessment noted that while some December improvements were encouraging, “the overall trend in confidence remains quite downward” with readings “nearly 30% below” year-earlier levels. Economists emphasized that confidence must not only stop declining but must post several consecutive months of substantial gains to signal genuine recovery rather than temporary fluctuations. The path to recovery likely requires a combination of declining inflation continuing into 2026, stable or improving labor market conditions with unemployment remaining low and hiring activity resuming, resolution of remaining tariff uncertainties, sustained stock market stability supporting wealth effects, and consistent government functioning without disruptions. If these conditions materialize, confidence could potentially recover toward 95-100 levels by mid-2026, restoring sentiment to more normal ranges. However, if labor market weakness materializes, inflation proves sticky, or new policy uncertainties emerge, confidence could remain depressed or decline further, potentially fulfilling the recession expectations that have dominated consumer psychology throughout 2025. The first quarter of 2026 will likely prove decisive, determining whether 2025’s confidence crisis was a temporary shock from which recovery is possible or the beginning of a more prolonged period of consumer pessimism that could become self-fulfilling through reduced spending and economic activity.
Disclaimer: The data research report we present here is based on information found from various sources. We are not liable for any financial loss, errors, or damages of any kind that may result from the use of the information herein. We acknowledge that though we try to report accurately, we cannot verify the absolute facts of everything that has been represented.
