Consumer confidence drops to lowest rating since 2021

The American consumer is getting worried about the economy as consumer confidence drops to its lowest rating since 2021. This comes as the Trump Administration aims to reconfigure America’s trade relationship with the world and inflation shows signs of getting stuck.

The Conference Board’s Consumer Confidence Index (CCI) for February, released on February 25, 2025, shows the index fell to 98.3, falling for the third-straight month and marking the largest monthly decline since August 2021, as expectations for inflation in the year ahead climbed.

Homebuilders are worried as well as small businesses.

Dennis Hoffman, Professor at W. P. Carey School of Business at ASU, joined us to discuss.

The CCI is a random sample survey of respondents that is divided by political affiliation, age and gender. There are two popular ones done yearly that are released around the same time, one from the University of Michigan and The Conference Board, a non-profit business and research organization.

One of the concerns popularly listed is inflation, however, Professor Hoffman said that he hears “nothing in the proposed policies that’s really going to be anti-inflation.” He said that President Trump’s second term now “will stoke inflation.” That includes tax cuts, mass deportation and tariffs.

“If you want to build a case for tariffs, it’s about national security, it’s about penalizing those particular countries that have not opened their markets efficiently so you want some retribution,” Professor Hoffman said.