Americans are feeling more pessimistic about the economy.

Consumer confidence dropped 7 points in February to 98.3 — its lowest level since August 2021, according to the latest Conference Board Consumer Confidence Index released Tuesday.

What You Need To Know

  • Consumer confidence dropped 7 points in February to its lowest level since August 2021, according to the latest Conference Board Consumer Confidence Index released Tuesday

  • Consumer expectations about their present situations fell 3.4 points, while their expectations for the short term fell 9.3 points, according to the not-for-profit, nonpartisan think tank

  • The drop in confidence was felt among all age groups but fell the most among 35- to 55-year-olds

  • Consumers now expect inflation to increase to 6% a year from now, according to the Conference Board survey, which closed Feb. 19

“This is the third consecutive month-on-month decline, bringing the Index to the bottom of the range that has prevailed since 2022,” Conference Board Global Indicators Senior Economist Stephanie Guichard said in a statement.

While consumers’ expectations about current business conditions improved slightly in February, their overall take on their present-day situations fell 3.4 points. Expectations for the short term fell 9.3 points, according to the not-for-profit, nonpartisan think tank.

“Views of current labor market conditions weakened," Guichard said. "Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high.”

The drop in confidence was felt among all age groups but fell the most among 35- to 55-year-olds. It was also felt among all income groups except for those earning less than $15,000 annually and households earning $100,000 to $125,000.

Consumers now expect inflation to increase to 6% a year from now, according to the Conference Board survey, which closed Feb. 19. Many of the surveyed individuals cited tariffs, sticky inflation and high prices for basics like eggs as the reasons for their pessimism.

In January, the annual inflation rate for the United States was 3% — up from 2.9% in December, according to the U.S. Bureau of Labor Statistics.

More consumers now anticipate a recession within the next year, and fewer of them expect stock prices to continue increasing. In February, about a third (32.8%) of respondents said they expect stocks to decline, compared with 24.8% who said so in January. 

More than half of those surveyed (51.7%) said they expect interest rates to increase over the next 12 months. Even so, more consumers plan to purchase homes.

Fewer people, however, plan to buy cars, TVs and electronics or to take vacations, the survey found.