- Consumer Confidence Index: ↓7.9 to 86.0
- Present Situation Index: ↓0.9 (overall)
- Expectations Index: ↓12 to 54*
* anything below 80 usually means we're tipping into recession
Putting Trump back in
the White House is like:
Oh no, I've shit my pants -
I guess I'd better change my shirt.
So much fucking winning.
WASHINGTON (AP) — Americans’ confidence in the economy slumped for the fifth straight month to the lowest level since the onset of the COVID-19 pandemic as anxiety over the impact of tariffs takes a heavy toll.
Five straight months. Remind me - how long ago was Trump elected?
The Conference Board said Tuesday that its consumer confidence index fell 7.9 points in April to 86, its lowest reading since May 2020. Nearly one-third of consumers expect hiring to slow in the coming months, nearly matching the level reached in April 2009, when the economy was mired in the Great Recession.
The figures reflect a rapidly souring mood among Americans, most of whom expect prices to rise because of the widespread tariffs imposed by President Donald Trump. About half of Americans are also worried about the potential for a recession, according to a survey by The Associated Press-NORC Center.
“Rattled consumers spend less than confident consumers,” said Carl Weinberg, chief economist at High Frequency Economics, in an email. “If confidence sags and consumers retrench, growth will go down.”
A measure of Americans’ short-term expectations for their income, business conditions and the job market plunged 12.5 points to 54.4, the lowest level in more than 13 years. The reading is well below 80, which typically signals a recession ahead.
How this gloomy mood translates into spending, hiring, and growth will become clearer in the coming days and weeks. On Wednesday, the government will report on U.S. economic growth during the first three months of the year, and economists are expecting a sharp slowdown as Americans pulled back on spending after a strong winter holiday shopping season.
And on Friday the Labor Department will release its latest report on hiring and the unemployment rate. Overall, economists expect it should still show steady job gains, though some forecast it could report sharply reduced hiring.
The stark decline in consumer confidence also likely reflected the sharp swings in stock and bond prices that roiled financial markets earlier this month. While all age groups and most income brackets reported lower confidence, the decline was steepest among households earning more than $125,000 and among consumers 35 to 55 years old.
Though major U.S. markets rebounded over the past week, the S&P 500 is still down 6% for the year and the Dow Jones has lost 5%. The growth-heavy Nasdaq is down 10% in 2025.
The Conference Board said that mentions of tariffs in write-in responses reached an all-time high this month, with the duties on the top of consumers’ minds. Trump has imposed a tariff of 10% on nearly all imports, as well as a huge 145% tariff on most goods from China. He has imposed separate import taxes on steel, aluminum, and cars.
More Americans are also now worried that the economy could tip into a recession, with the proportion of consumers expecting a downturn in the next 12 months reaching a two-year high.
Fewer consumers said they were planning to buy a home or car in the next six months. Sales of previously occupied U.S. homes slowed last month in a lackluster start to the spring homebuying season as elevated mortgage rates and rising prices discouraged those looking.
And Americans also said they would spend less on services. The proportion of Americans planning an overseas vacation in the next six months fell to 16.4%, down from 24.1% in December. And the proportion of consumers planning to spend more on dining out plummeted by nearly the most on record in April, the Conference Board said.
Tame March PCE inflation no salve after downbeat Q1 US GDP report
April 30 (Reuters) - Consumer spending, which accounts for more than two-thirds of U.S. economic activity, surged 0.7% in March after an upwardly revised 0.5% gain in February, the Commerce Department' said on Wednesday. Economists polled by Reuters had forecast consumer spending would rise 0.5% after a previously reported 0.4% increase in February.
The data was included in the advance gross domestic product report for the first quarter that was published earlier on Wednesday, which showed GDP contracted at a 0.3% annualized rate last quarter, weighed down by a record surge in imports.
President Donald Trump's sweeping tariffs have fanned fears the economy is facing a period of tepid growth, even recession, and high inflation, commonly referred to as stagflation. The Personal Consumption Expenditures (PCE) Price Index was unchanged in March after advancing 0.4% in February. In the 12 months through March, PCE prices increased 2.3% after rising 2.7% in February.
MARKET REACTION:
STOCKS: The S&P 500 (.SPX), opens new tab was down 1.7%, holding losses after the data but off the day's lowest levels
BONDS: U.S. Treasury 10-year yield seesawed in a small range and was up 0.5 bp at 4.1792%. The two-year yield was 4.1 bp lower at 3.617%
FOREX: The dollar index likewise gyrated and was 0.28% higher
COMMENTS:
CHARLIE RIPLEY, SENIOR INVESTMENT STRATEGIST, ALLIANZ INVESTMENT MANAGEMENT, MOUND, MINNESOTA
"Personal consumption was up slightly from expectations. When you layer in the (PCE) inflation data, it was a little bit better than expected from an overall perspective, coming in a little bit lighter. But I don't think that's the number that the market's reading too much into.""The labor market data is really key as we go forward from here... any meaningful slowdown in hiring or job separations is going to lead to a deterioration in consumption.""The Fed has been very data dependent and they're going to want to see some of this hard data like GDP and some of the labor market data really show signs of weakness. We are starting to see a little bit of that, which is really why you're seeing the market reacting the way it is today."
OLIVER PURSCHE, SENIOR VICE PRESIDENT, ADVISOR, WEALTHSPIRE ADVISORS, WESTPORT, CONNECTICUT
"It's important to realize that a large chunk of the fall in GDP is due to the sharp increase in imports, which take away from GDP growth. And that's probably due to the expectation of tariffs. So, if you were to normalize that, you end up with positive GDP growth for the quarter, but it certainly doesn't bode well for Q2, which is why the market is selling off.
"The almost unchanged level of core PCE prices in March is welcome news but, given the data precede the implementation of broad-based tariffs, core inflation will inevitably rebound sharply in the coming months. Otherwise, the strong rise in real consumer spending last month should soothe fears that consumers are retrenching in the face of economic uncertainty.
"The 0.03% m/m rise in core PCE prices is smallest rise since April 2020 and the first below-target-consistent reading in four months. It pushed the annual core inflation rate down to 2.6%, from an upwardly-revised 3.0% in February. The three- and six- month annualized rates also fell to 3.5% and 3.0% respectively. The breakdown shows a fall in core goods prices, whereas core services prices edged up. That said, March’s data naturally do not reflect the impact of the broad-based tariffs implemented in April, so goods prices will rise much more strongly in the coming months. As a result, we expect core PCE inflation to reach a peak of almost 4% later this year."
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN
"Weak private sector payroll growth, faster inflation than expected, and a negative GDP print all point in the direction of stagflation. To get the stagflation of the late '70s and early '80s would require much higher unemployment and inflation, so this is more of an aroma of stagflation than an actual stench of stagflation."On the surface, the negative sign on GDP growth is upsetting, but final sales to domestic purchasers increased at a pretty decent 3% annualized pace. The surge in imports showed up mostly in information processing equipment and is in the “investments” bucket of GDP."It’s unfortunate that the convention is to focus on spending instead of production. In GDP, the P stands for production, not spending. To back into actual production, they subtract out imports, so it perpetuates the myth that imports are a bad thing."Real Gross Value Added is a better way to look at actual production instead of spending. Those details show where the real pain is being felt. Business value add fell 0.65% with farm value add falling a massive 35%. Federal government value add fell 1.6%."
ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER AT DAKOTA WEALTH IN FAIRFIELD, CONNECTICUT
"Inflation is up. The economy is slowing more. It's not a great environment for the equity market. GDP is backward looking but it doesn't portend good information going forward not with the environment we're currently in. There's still uncertainty with the trade tariffs being high, and uncertainty around what's going to happen.""People are pulling back on spending. People not being sure about their jobs. If you're unsure about your job you're certainly not going to be making major purchases or life changing decisions as far as purchases are concerned."
WASIF LATIF, PRESIDENT AND CHIEF INVESTMENT OFFICER, SARMAYA PARTNERS, PRINCETON, NEW JERSEY
“It’s a surprising number to the market on the downside. This is sort of in line with what we've been anticipating that we might be entering into a 70s-like scenario with weakening economic growth and still sticky, persistent inflation. That’s where you are seeing the response between bond yields moving up and equities going down. But we do need to take a step back because there is some noise in this GDP report because of the pull forward activity on inventory build and then the shipments of gold that impacted the international trade number that goes into the GDP data.”
LOU BRIEN, MARKET STRATEGIST, DRW TRADING, CHICAGO
"When you look to real final sales, which fell 2.5%, that's the GDP not counting the inventory data, that's a significantly weak number. It's the weakest since the pandemic period and prior to the pandemic you have to go back to 2009 to find a quarter that has a weaker real final sales. So I think that's probably the reason for the bonds to jump initially, but reconsidering, they probably looked over to the inflation measures, the GDP deflator and the PCE core, both significantly higher than anticipated. And so there was a little bit of a push me pull you on the bond market as a result of the report."
PETER ANDERSEN, FOUNDER OF ANDERSEN CAPITAL MANAGEMENT, BOSTON
"There shouldn't be a surprise, but the market is acting as if it is a surprise. This period where tariffs are trying to be negotiated and acknowledged by the market makes things extremely difficult to model, predict, etc. When the market cannot make a reasonable prediction, it tends to turn to the pessimistic interpretation of things."
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK
“The economy has shown negative growth, which means that we are probably already in a mild recession, or we're about to enter a mild recession.”“That's obviously bad news but I would kind of think that the market has been already discounting the possibility of a mild recession now.”“We got to these numbers because of Trump's policies, right? They've created uncertainty and when you create uncertainty, nobody's going to put their foot on the accelerator, and we're seeing that as the earnings come out, right? Guidance has been pulled back.”“So Trump's policies have created this. But you know, he himself many times has said we might be headed for recession. He's not denied that. Is he going to take a victory lap with these numbers? No, of course not.”“But these numbers may accelerate the administration in perhaps reversing the tariff policy, and that would psychologically be a big boost to the economy.”“I think the damage has already been done and so no matter what they do now, they just have to hope that the recession is not a steep one and that the there is a positive ending to the tariff situation. That's what the administration needs to hope for at this point.”
JAMIE COX MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND VIRGINIA.
"I'm not surprised the headline GDP print wasn't worse, given the surge in imports. Underneath, however, real final demand remains super strong. Those who underestimate the US consumer, do so at their own peril."
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