*United States consumers became pessimistic about future business conditions, and less optimistic about future income, as pessimism about future employment prospects worsened and reached a ten-month high in a recent survey

Isola Moses | 绿帽献妻

Amid inflation and the costs of activities, over half of Americans feeling increasingly pessimistic about the economy, just as they are delaying major life plans due to uncertainty over the state of the economy.

The results are part of a new study from Wells Fargo.

In the study, among that cohort, about one-third of consumers said they are putting off buying a home, while one in six have postponed education plans, and one in eight have pushed back their retirement.

The consumer confidence index measures both Americans鈥� assessment of current economic conditions, and their outlook for the next six months.

Although inflation has moderated since a peak in 2022, Americans are still shocked by high prices, agency report said.

Likewise, about 90 percent disclosed they were surprised by the costs of activities like eating out or attending a concert in the American country.

Still, about 76 percent plan to cut back on spending this year, up from 67 percent 2024, according to the study, which was conducted September and October last year.

There have been signs recently that Americans are feeling increasingly pessimistic about the economy.

Recently, long-term inflation expectations rose to the highest level in almost three decades, and the consumer sentiment index has declined, according to report.

In a related development, the US consumer confidence plummeted February 2025, the biggest monthly decline in over four years, with inflation seemingly stuck and a trade war under President Donald Trump seen by a growing number of Americans as inevitable.

It was gathered the Conference Board reported that its consumer confidence index sank this month to 98.3 from 105.3 January.

That鈥檚 far below the expectations of economists, who projected a reading of 103, according to a survey by FactSet.

The seven-point drop was the biggest month-to-month decline since August of 2021.

Markets on Wall Street immediately dropped. The S&P 500 fell 0.6% in midday trading, while the Dow Jones Industrial Average was flat. The Nasdaq declined 1.1%.

Respondents to the board鈥檚 survey expressed concern over inflation with a significant increase in mentions of trade and tariffs, the board said.

The Conference Board鈥檚 recent report said that the measure of Americans鈥� short-term expectations for income, business and the job market fell 9.3 points to 72.9.

The Conference Board says a reading under 80 can signal a potential recession in the near future.

The proportion of consumers expecting a recession over the next year jumped to a nine-month high, the board said.

Consumers鈥� view of current conditions tumbled 3.4 points to a reading of 136.5 this month and views on current labour market conditions fell again.

鈥淰iews of current labor market conditions weakened,鈥� the group said Tuesday, February 25, 2025.

鈥淐onsumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high.鈥�

Consumers appeared increasingly confident heading into the end of 2024 and spent generously during the holiday season.

However, US retail sales dropped sharply in January, with cold weather taking some of the blame for a dent in vehicle sales and at retail stores.

How inflation remained sticky

Retail sales fell 0.9 percent January 2025 from December 2024, the Commerce Department reported recently.

The decline, the biggest in a year, came after two months of healthy gains.

Inflation has also remained sticky. So much so that the US Federal Reserve has taken a more cautious approach to interest rates, leaving its benchmark borrowing rate alone at its last meeting after cutting it at the previous three.

Fed officials have also expressed uncertainty over the new administration鈥檚 policies.

According to experts, the most recent economic data and a pessimistic turn among American households does not bode well for the US economy.

In a note to clients, Carl Weinberg, Chief Economist at High Frequency Economics, wrote: 鈥淏ased on all the indicators showing declining consumer and business confidence and sentiment, we are expecting a slowing economy.鈥�

Consumer spending accounts for about two-thirds of US economic activity, and is closely watched by economists for signs about how the American consumer is feeling.

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