American consumers are growing sharply more pessimistic, with expectations about their financial future plunging to the lowest levels since October 2011.
Inflation expectations spike as job prospects darken, underscoring the economic challenges surfacing as President Donald Trump celebrates his first 100 days in office with a rally in Michigan.
In a report shared Tuesday by The Conference Board, the Consumer Confidence Index dropped 7.9 points in April to 86, the lowest reading since March 2023 and part of a five-month losing streak.
The Expectations Index, which reflects consumers’ outlook on income, business and labor conditions for the next six months, collapsed to 54.4, a 13-year low not seen since October 2011. Historically, values below 80 have preceded recessions in the U.S.
Pervasive Pessimism Grips US Consumers
The April drop “was largely driven by consumers’ expectations,” said Stephanie Guichard, senior economist at The Conference Board. All three subcomponents—future business conditions, employment, and income—showed a sharp deterioration, she added.
“Notably, the share of consumers expecting fewer jobs in the next six months was 32.1%, which is nearly as high as in April 2009, in the middle of the Great Recession,” Guichard said.
The proportion of consumers anticipating an income decline also rose, hitting 18.2% in April from 14.9% in March.
Meanwhile, only 15% expect their income to rise—down from 17.1%—marking the first time in five years that income expectations turned clearly negative, a sign that Americans are not just anxious about the economy at large but also increasingly doubtful about their personal financial situations.
Consumer spending intentions—a key indicator of future demand—are also faltering. The six-month moving average shows declining plans to purchase homes, cars and vacations.
April saw a pullback in intentions to buy major appliances and electronics, although those figures remain higher compared to earlier months.
Even spending on services, which had been resilient, showed weakness. While dining out remains the top spending priority among services, the share of consumers planning to spend more in this category posted one of the steepest monthly declines on record.
Inflation Expectations Soar Amid Tariff Concerns
Average inflation expectations for the next 12 months jumped to 7%, the highest level since November 2022.
In an environment where the Federal Reserve has yet to resume interest rate cuts, persistently high inflation expectations could be a red flag for policymakers hoping to avoid stalling economic growth.
At the same time, equity market turbulence appears to be adding to consumer anxiety. According to the Conference Board, 48.5% of respondents expect stock prices to decline over the next year—the highest proportion since 2011.
“High financial market volatility in April pushed consumers’ views about the stock market deeper into negative territory,” Guichard said.
One of the most unexpected findings from April’s survey was a surge in concern over tariffs.
Consumer write-ins revealed that worries about rising tariffs and their impact on prices are at an all-time high.
While inflation and cost-of-living pressures remain dominant themes, new mentions of tariffs suggest that geopolitical and trade-related risks are starting to affect household sentiment.
Recession Fears Take Hold
Beyond the headline figures, one of the clearest warning signals is the rise in the share of consumers anticipating a U.S. recession in the next 12 months.
The share of consumers who consider a recession somewhat or very likely within the next 12 months has surged to 72%, highlighting the deepest level of economic anxiety in over two years.
With interest rate expectations shifting higher and job prospects dimming, the data paints a clear picture: consumers are tightening their belts and bracing for economic turbulence.
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