Falling Consumer Confidence Has Tripped This Recession Alarm

It’s been more than a decade since consumers have predicted an economic future this bleak, and it’s ringing a recession alarm bell. 

Tuesday’s consumer confidence survey showed expectations over near-term business conditions, employment prospects, and future income declined sharply in April. Consumer confidence dropped for the fifth month to pandemic-era lows amid uncertainty over President Donald Trump’s tariff policies.

The Expectations Index dropped 12.5 points in April to 54.4. That’s the lowest reading in the Conference Board survey since October 2011 and well below the threshold of 80, which historically has indicated a recession is on the horizon.

“Consumers are growing more and more anxious about their financial situation,” wrote Wells Fargo economists Tim Quinlan, Shannon Grein and Jeremiah Kohl. “Talk around tariffs has spooked consumers into believing inflation will be higher in the future, and it’s depressed their expectations around the economy generally.”

Survey Shows Inflation Fears Creating Job, Income Worries

The survey results are just the latest to show increasing consumer pessimism over U.S. tariff policy.

Recent declines in similar consumer sentiment surveys have been tied to worries over increased inflation. However, Tuesday’s report showed that tariff jitters are spilling over to the labor market. Only 31.7% of respondents said jobs were plentiful, down from 33.6% in the month prior.

“The markedly deteriorating readings in the labor market are most concerning since these indicators have a good relationship with current and future employment trends,” said Nationwide Chief Economist Kathy Bostjancic.

The report also showed that consumers’ expectations for their future income turned negative for the first time in five years.

“Concerns about the economy have now spread to consumers worrying about their own personal situations,”  said Stephanie Guichard, senior economist at The Conference Board.