U.S. consumer confidence fell in February 2025, with The Conference Board reporting a decline to an index of 98.3, marking a significant drop from January.
This decline signals broader economic uncertainty, affecting market behavior with immediate declines in major stock indices such as the S&P 500.
Consumer Confidence Index Sees Largest Drop Since 2021
The Conference Board’s Consumer Confidence Index for February 2025 stands at 98.3, which saw a 7.0 point drop from January. This decline represents the largest monthly fall since August 2021.
The Present Situation Index hit 136.5, decreasing 3.4 points from January, while the Expectations Index dropped 9.3 points to 72.9, reflecting consumer pessimism. Stephanie Guichard, Senior Economist at The Conference Board, stated,
“In February, consumer confidence registered the largest monthly decline since August 2021. This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022.”
Major Stock Indices Fall as Markets React
The latest price data indicates that markets reacted negatively, with the S&P 500 falling 0.8%. The Dow Jones Industrial Average dropped 1.7%, while the Nasdaq declined by 1.6%, reflecting investor concerns.
Experts suggest that the increase in inflation expectations, reaching 6%, could lead to potential increases in consumer costs, influencing financial decisions and economic policy adjustments.
February’s Confidence Decline Mirrors August 2021 Trends
February 2025’s drop in consumer confidence is similar to the decline seen in August 2021. Historically, such shifts precede periods of economic adjustment, affecting policy and market reactions.
Economists, including Carl Weinberg, emphasize the importance of monitoring trends as indicators suggest a potential economic slowdown. Historical data supports cautious optimism amidst these economic fluctuations. Carl Weinberg, Chief Economist at High Frequency Economics, wrote,
“Based on all the indicators showing declining consumer and business confidence and sentiment, we are expecting a slowing economy.”
