WASHINGTON — U.S. consumer confidence experienced a sharp decline in February, marking the largest monthly drop in over four years, according to a report by a business research group on Tuesday. This decline is attributed to persistent inflation and growing concerns among Americans about an inevitable trade war under President Donald Trump. The Conference Board reported a decrease in its consumer confidence index to 98.3 from 105.3 in January, falling short of economists’ expectations of 103 as per a FactSet survey. This seven-point drop is the most significant since August 2021. Following the announcement, Wall Street markets reacted negatively with the S&P 500 falling 0.7%, the Dow Jones Industrial Average sliding 1.7%, and the Nasdaq declining 1.4%. Survey respondents expressed worries over inflation, with increased mentions of trade and tariffs. The Conference Board noted a 9.3-point decrease in Americans’ short-term expectations for income, business, and the job market, reaching 72.9. A reading below 80 could indicate a potential recession. The proportion of consumers expecting a recession in the next year reached a nine-month high. Views on current conditions fell 3.4 points to 136.5, with labor market perceptions also declining. The group highlighted growing pessimism about future business conditions, income, and employment prospects, which reached a ten-month high. Despite strong holiday spending at the end of 2024, U.S. retail sales dropped sharply in January, partly due to cold weather affecting vehicle sales. Retail sales fell 0.9% from December, the largest decline in a year after two months of gains, according to the Commerce Department. The consumer confidence index reflects both current economic conditions and future outlooks, with consumer spending accounting for about two-thirds of U.S. economic activity. — news from ABC News
