US Consumer Confidence Index 2025 | Statistics & Facts

Consumer Confidence Index in America 2025

The Consumer Confidence Index (CCI) in the United States has experienced substantial fluctuations throughout 2025, reflecting Americans’ evolving sentiments about economic conditions, employment prospects, and their financial futures. As one of the most critical economic indicators tracked by policymakers, businesses, and financial analysts, the consumer confidence index serves as a barometer for understanding household spending intentions and overall economic health. Throughout 2025, the index has been significantly influenced by multiple factors including persistent inflation concerns, ongoing tariff negotiations, a cooling labor market, and an unprecedented federal government shutdown that began in early October and extended through November.

The Consumer Confidence Index measures how optimistic or pessimistic consumers are regarding their expected financial situation, the general state of the economy, and employment conditions. With consumer spending accounting for approximately 70% of U.S. GDP, movements in the consumer confidence index have substantial implications for economic growth trajectories. Data from 2025 reveals that consumer sentiment has remained below pre-pandemic levels, with particular weakness emerging in forward-looking expectations components. The Conference Board’s index has consistently shown readings that signal recessionary concerns, with the Expectations Index remaining below the critical threshold of 80 since February 2025, a level that historically signals an impending recession.

Key Facts About Consumer Confidence Index in the US in 2025

Data Source: The Conference Board Consumer Confidence Survey®, University of Michigan Surveys of Consumers

The data presented in this comprehensive table reveals the challenging landscape facing American consumers in 2025. The Conference Board Consumer Confidence Index registered 94.6 points in October 2025, marking a modest decline from September’s upwardly revised 95.6. More dramatically, the University of Michigan Consumer Sentiment Index plummeted to 50.3 points in November 2025, representing a staggering 30% year-over-year decline and the second-lowest reading in the survey’s history dating back to 1978. This dramatic deterioration in consumer sentiment reflects widespread economic anxiety, particularly surrounding the ongoing federal government shutdown that has persisted for over a month.

The bifurcation between current conditions and future expectations is particularly striking in 2025 data. While the Present Situation Index stood at 129.3 points in October, indicating relatively stable current economic conditions, the Expectations Index languished at just 71.5 points—remaining below the critical 80-point threshold for 9 consecutive months since February 2025. This divergence suggests that while consumers acknowledge current economic stability, they harbor significant pessimism about future prospects. Furthermore, Americans are planning to significantly curtail holiday spending, with expectations to spend 3.9% less on gifts and 12% less on non-gift items compared to 2024, underscoring the cautiousness pervading consumer behavior.

Consumer Confidence Index Monthly Trends in the US in 2025

Data Source: The Conference Board Consumer Confidence Survey® Monthly Reports

The monthly trajectory of the Consumer Confidence Index throughout 2025 tells a compelling story of economic volatility and consumer uncertainty. The year began with the index at 104.7 points in January, reflecting relatively optimistic sentiment carried over from late 2024. However, confidence began eroding in February, and March witnessed a precipitous decline of 9.6 points, bringing the index down to 92.9—the sharpest monthly drop in the first quarter. April continued this downward trend, with confidence plummeting to 86.0 points, representing a five-year low and reflecting widespread anxiety following major tariff announcements and escalating trade tensions.

May 2025 marked a notable turning point, as the index surged by 12.3 points to 98.0—the largest single-month increase in four years. This rebound was primarily driven by the announcement of a temporary trade deal with China on May 12th, which eased immediate tariff concerns and provided temporary relief to businesses and consumers alike. However, this improvement proved ephemeral, as confidence resumed its decline through the summer months. By September, the index had retreated to 94.2 points, and October saw only marginal improvement to 94.6 points. Throughout this entire period, the Expectations Index remained consistently below the 80-point recession threshold, never recovering above this critical level after February. This persistent weakness in forward-looking expectations, contrasted against relatively stable present situation assessments, reveals a fundamental disconnect between current economic conditions and consumer outlook for the future.

Inflation Expectations Impact on Consumer Confidence in the US in 2025

Data Source: Federal Reserve Bank of New York Survey of Consumer Expectations, University of Michigan Surveys of Consumers

Inflation expectations have played a pivotal role in shaping consumer confidence throughout 2025, with Americans displaying heightened sensitivity to price pressures across multiple categories. The Federal Reserve Bank of New York’s Survey of Consumer Expectations revealed that one-year inflation expectations decreased to 3.2% in October 2025, down from 3.4% in September, suggesting some moderation in near-term price concerns. However, the University of Michigan’s survey painted a more concerning picture, with year-ahead inflation expectations ticking up to 4.7% in November from 4.6% in October, indicating persistent worry about price stability.

The data reveals significant variation in inflation expectations across different spending categories, with essential goods and services experiencing particularly elevated price increase anticipations. Medical care cost expectations reached 9.3% for the year ahead in September 2025, representing the highest reading since March 2023 and reflecting ongoing concerns about healthcare affordability. Rent increase expectations surged to 7.0% in September, up a full percentage point from August, underscoring housing affordability challenges. Food price expectations climbed to 5.8%, the highest level since March 2023, as consumers grappled with persistent grocery price pressures. These elevated inflation expectations have directly contributed to weakened consumer confidence, as households anticipate that their purchasing power will continue to erode. Notably, while long-run inflation expectations declined from 3.9% to 3.6% in November, indicating some anchoring of inflation expectations at the five-year horizon, the near-term concerns remain sufficiently elevated to suppress consumer spending intentions and overall confidence levels.

Labor Market Perceptions and Consumer Confidence in the US in 2025

Data Source: U.S. Bureau of Labor Statistics, The Conference Board, Federal Reserve Bank of New York

Labor market conditions and perceptions have emerged as critical drivers of consumer confidence dynamics throughout 2025. The official unemployment rate stood at 4.3% in August 2025, representing a relatively healthy labor market by historical standards. However, beneath this headline figure lies growing concern, as nonfarm payroll employment has shown minimal growth, adding just 22,000 jobs in August and demonstrating little change since April. This near-stagnation in job creation has been accompanied by a notable shift in consumer perceptions of labor market tightness.

In August 2025, only 29.7% of consumers characterized jobs as “plentiful,” continuing a seven-month downward trajectory that began in January when 32.5% held this view. Conversely, 20.0% of consumers reported that jobs were “hard to get” in August, up from 18.9% in July and 14.5% at the beginning of the year. This deteriorating perception of job availability has been particularly pronounced among younger workers and those without college degrees. The probability that consumers expect to lose their jobs within the next 12 months increased to 14.9% in September 2025, above the trailing 12-month average of 14.1%, while the mean perceived probability of finding a new job within three months if one’s current position was lost rebounded only modestly to 47.4% in September after hitting a series low of 44.9% in August, remaining well below the 12-month average of 51.0%.

Perhaps most concerning for future consumer confidence trajectories, unemployment expectations have risen substantially, with the mean probability that the U.S. unemployment rate will be higher one year from now increasing to 42.5% in October 2025—marking the third consecutive monthly increase. Simultaneously, one-year earnings growth expectations have remained subdued at 2.6% in October, below the trailing 12-month average of 2.7% and suggesting that workers do not anticipate significant wage gains to offset inflation pressures. These combined labor market indicators—weak job creation, deteriorating perceptions of job availability, rising unemployment expectations, and modest wage growth prospects—have contributed significantly to the persistent weakness in the Expectations Index component of overall consumer confidence.

Consumer Spending Patterns and Confidence Correlation in the US in 2025

Data Source: J.P. Morgan Chase Transaction Data, Bloomberg Second Measure, Bank of America Institute Consumer Checkpoint, Federal Reserve Bank of Boston

The relationship between consumer confidence and actual spending patterns has revealed important nuances throughout 2025, with income-based disparities becoming increasingly pronounced. Overall consumer spending is projected to grow by 3.7% year-over-year in 2025, representing a deceleration from 5.7% growth in 2024 but still indicating resilient consumption despite weakened sentiment. However, this aggregate figure masks significant variation across income cohorts and spending categories. Credit card transaction data from the Federal Reserve Bank of Boston shows that high-income consumers maintained spending levels around $1,400 per month per card as of May 2025, sustaining the elevated plateau established in 2021. In contrast, low-income consumers spending remained at approximately $300 per month per card, reflecting a step-up from pre-pandemic levels but demonstrating far less growth momentum.

The divergence in spending behavior by income level has become particularly stark in 2025. Lower and middle-income consumers have increasingly curtailed discretionary expenditures, particularly in categories like dining out, personal travel, and entertainment. Spending intentions for dining out—the number one category in services spending—experienced one of the largest declines in July, alongside transportation and lodging related to personal travel. Vacation intentions continued their downward trend at the start of 2025, with Americans demonstrating increased caution about non-essential travel expenditures. Meanwhile, higher-income households have demonstrated greater spending resilience, particularly those benefiting from strong stock market performance through much of the year.

The data also reveals shifting priorities in consumer purchasing decisions. Home purchasing plans weakened in October 2025, though the overall six-month trend showed modest improvement, reflecting persistent affordability challenges with mortgage rates remaining elevated. Car purchasing plans increased in October, driven primarily by intentions to buy used rather than new vehicles, suggesting value-consciousness among buyers. Big-ticket appliance and electronics purchasing intentions remained mixed, with considerable month-to-month variation indicating uncertainty and opportunistic buying behavior. Perhaps most significantly, online shopping frequency declined by 15% on a weekly basis across all channels in 2025 compared to 2024, suggesting either shopping fatigue or more deliberate, less frequent purchasing decisions as consumers navigate economic uncertainty. These spending patterns demonstrate that while consumer confidence has weakened substantially, actual consumption has proven more resilient than sentiment might suggest, supported by continued employment and accumulated savings, though with growing disparities across income levels.

Government Shutdown Impact on Consumer Confidence in the US in 2025

Data Source: University of Michigan Surveys of Consumers, Congressional Budget Office, Morning Consult Index of Consumer Sentiment

The federal government shutdown that began in early October 2025 has emerged as a defining factor influencing consumer confidence in the final months of the year. According to Congressional Budget Office estimates, as many as 750,000 federal government workers have been furloughed during the shutdown, representing approximately 0.4% of the civilian labor force as of August 2025 data. The impact on consumer sentiment has been swift and severe, with the University of Michigan Consumer Sentiment Index falling back approximately 6% in November, marking the largest monthly decline since August 2022 and pushing the index to 50.3 points—the second-lowest reading in the survey’s history extending back to 1978.

The shutdown’s effects have been far from uniform across the population. Lower-income consumers, particularly those earning under $50,000 annually, have been disproportionately affected, with their sentiment reaching the lowest level since July 2024. This cohort faces the most immediate and severe impacts, as many depend on government assistance programs like SNAP (Supplemental Nutrition Assistance Program) benefits, which have experienced delays and reductions across multiple states. The current personal finances component of the sentiment survey plummeted by 17% in November, reflecting acute financial stress as federal workers miss paychecks and benefit recipients face uncertainty. Year-ahead expected business conditions declined by 11%, indicating widespread pessimism about economic prospects as the shutdown drags on.

Interestingly, one notable exception to the declining sentiment trend emerged among consumers with the largest tercile of stock holdings, who posted an 11% increase in sentiment in November, buoyed by continued strength in equity markets despite the political crisis. This divergence underscores growing inequality in economic experiences and confidence levels across different socioeconomic strata. The shutdown has also created significant policy uncertainty, as all federal economic data compilation has been suspended since early October, leaving policymakers, businesses, and investors operating with incomplete information about economic conditions. Survey respondents increasingly cited the shutdown as a primary concern affecting their economic outlook, surpassing even the previously dominant mentions of tariffs and inflation. The extended nature of the shutdown—persisting for over a month with no clear resolution in sight as of mid-November—has amplified recession fears, with the share of consumers expecting a recession over the next 12 months rising, while paradoxically, the share believing the economy is already in recession increased for the third consecutive month.

Demographic Variations in Consumer Confidence in the US in 2025

Data Source: The Conference Board Consumer Confidence Survey®, Morning Consult Index of Consumer Sentiment, Federal Reserve Bank of New York

The consumer confidence landscape in 2025 has been marked by significant demographic variations, with age, income, education, gender, and political affiliation all playing substantial roles in shaping sentiment patterns. Younger consumers under 35 years old have consistently demonstrated the most pessimistic trajectory throughout the year, with their confidence declining in October 2025 and exhibiting sustained weakness relative to other age cohorts. This group faces particular challenges including student loan obligations, difficulty entering the housing market due to elevated home prices and mortgage rates, and greater vulnerability to labor market cooling. Despite being among the most optimistic overall earlier in 2025, their forward momentum has stalled as economic uncertainty has mounted.

In contrast, middle-aged consumers between 35 and 54 showed improving confidence in October, likely benefiting from more established career positions, accumulated assets, and greater financial stability. However, consumers over 55 presented a mixed picture—while some experienced declining sentiment due to concerns about retirement savings and fixed incomes in an inflationary environment, others, particularly those with substantial stock market exposure, saw confidence gains as equity markets maintained strength through much of 2025.

Income disparities have become particularly pronounced. Consumers earning under $75,000 annually experienced falling confidence throughout October, bearing the brunt of inflation impacts on essential spending categories and facing greater vulnerability to labor market weakening. Meanwhile, consumers earning over $200,000 posted the largest confidence increases in October, benefiting from strong wage growth, substantial stock portfolios appreciating in value, and greater financial buffers against economic uncertainty. This widening confidence gap by income mirrors broader wealth inequality trends and has significant implications for overall consumption patterns, as higher-income households account for a disproportionate share of discretionary spending.

The gender divide in sentiment widened to historic proportions in 2025, with women’s Index of Consumer Sentiment scores dropping to their lowest level in nearly two years in November, while men’s sentiment backtracked by only a few months. This unprecedented gap may reflect differential impacts of economic uncertainty, caregiving responsibilities, and labor market experiences. Educational attainment also played a role, with consumers without college degrees showing greater vulnerability to weakening labor market conditions and expressing more persistent pessimism compared to their college-educated counterparts who maintained more stable confidence levels. Political affiliation demonstrated complex patterns throughout 2025, with Republican consumers showing slight declines, Democrat consumers experiencing more pronounced drops, and Independent consumers actually improving their outlook in October. These demographic variations underscore the heterogeneous nature of economic experiences in 2025 and highlight the challenge of interpreting aggregate confidence measures when underlying sentiment varies so dramatically across population segments.

Tariff Concerns and Trade Policy Impact on Consumer Confidence in the US in 2025

Data Source: The Conference Board Consumer Confidence Survey®, Bureau of Labor Statistics, J.P. Morgan Research

Tariff concerns and trade policy uncertainty have been dominant drivers of consumer confidence fluctuations throughout 2025, creating multiple waves of optimism and pessimism. The year’s confidence trajectory was fundamentally shaped by major tariff announcements in early spring, with April witnessing consumer confidence plummet to a five-year low of 86.0 points following the Trump Administration’s sweeping tariff proposals affecting trade relationships with China, the European Union, and other major partners. Consumer write-in responses during March and April were dominated by references to tariffs, with survey participants expressing concerns that these trade barriers would lead to higher prices across a broad range of consumer goods, from electronics to clothing to household items.

The dramatic turnaround came on May 12th, 2025, when the United States and China announced a temporary deal to lower mutual tariffs. This single development triggered the largest monthly increase in consumer confidence in four years, with the index surging 12.3 points to 98.0 in May. The improvement was particularly pronounced in the Expectations Index, which soared 17.4 points as consumers became less pessimistic about future business conditions and the inflation outlook. Approximately half of the Conference Board survey responses were collected after the May 12th announcement, allowing the impact to be clearly measured. Consumer outlook on stock prices improved dramatically, with 44% expecting stock prices to increase over the next 12 months (up from 37.6% in April) and only 37.7% expecting declines (down from 47.2%).

However, this optimism proved temporary, as tariff concerns remained elevated throughout the subsequent months even after some policy rollbacks. References to tariffs in consumer write-in responses continued at high levels through October, though declining from peak levels seen in April and May. Notably, while consumers expressed hopes that trade deals could support economic activity, many continued to cite worries about tariffs increasing prices and having negative economic impacts. The actual realized tariff rate through September 2025 came in at approximately 10%, according to J.P. Morgan analysis—significantly below the feared levels—as U.S. companies increasingly switched to sourcing from lower-tariff countries. This substitution effect meant that firms were better able to absorb cost increases with less impact on consumer prices than initially predicted. Nevertheless, the psychological impact of tariff uncertainty on consumer confidence persisted, contributing to holiday spending intentions that showed consumers planning to buy fewer goods if imported item prices were inflated by tariffs. The tariff saga of 2025 demonstrates how policy uncertainty, even when actual implementation proves less severe than anticipated, can substantially depress consumer sentiment and economic decision-making.

Present Situation vs Future Expectations Divergence in the US in 2025

Data Source: The Conference Board Consumer Confidence Survey® Detailed Components

One of the most striking features of the consumer confidence landscape in 2025 has been the persistent and widening divergence between the Present Situation Index and the Expectations Index. This bifurcation reveals a fundamental disconnect in how Americans view their current circumstances versus their outlook for the future. In October 2025, the Present Situation Index stood at 129.3 points, a level that suggests reasonably favorable current conditions despite some weakening from the year’s high of 137.2 in February. This component reflects consumers’ assessments of present business and labor market conditions, which have remained relatively stable throughout much of 2025 even as forward-looking sentiment deteriorated.

In stark contrast, the Expectations Index registered just 71.5 points in October 2025—marking 9 consecutive months below the critical threshold of 80 that historically signals an impending recession. This sustained weakness in expectations represents one of the longest periods of recessionary signals in the index’s history outside of actual recession periods. The gap between these two components reached 57.8 points in October, representing one of the widest divergences on record and indicating profound pessimism about the future despite acknowledgment of current stability.

Breaking down the components reveals the sources of this divergence. When assessing current business conditions, 22.0% of consumers characterized them as “good” in October, while only 14.2% said conditions were “bad”—a relatively favorable balance. Similarly, 29.7% reported jobs were “plentiful” compared to 20.0% saying jobs were “hard to get,” indicating continued labor market functionality despite some cooling. However, when consumers shifted their gaze to the future, optimism evaporated dramatically. Only 19.5% expected business conditions to improve over the next six months, while 21.9% anticipated deterioration—a notably pessimistic outlook that contrasts sharply with current assessments.

This divergence pattern has profound implications for economic forecasting and policy. The Present Situation Index suggests that the economy has continued functioning reasonably well through 2025, with employment remaining relatively stable and businesses continuing operations. However, the Expectations Index warns of impending challenges, as consumers anticipate deteriorating conditions across multiple dimensions. When consumers expect future unemployment to rise, business conditions to worsen, and their own income growth to remain subdued at 18.3% anticipating increases versus higher percentages expecting stagnation or decline, they naturally become more cautious in their spending behavior. This forward-looking pessimism, if sustained, can become self-fulfilling as reduced spending intentions translate into actual consumption cutbacks, potentially triggering the very recession that consumers fear. The 9-month stretch below the 80-point recession threshold in the Expectations Index represents a clear warning signal that, despite currently stable conditions, consumer pessimism about the future poses significant downside risks to economic growth in the coming quarters. Historical patterns suggest that when the Expectations Index remains this depressed for extended periods, recession typically follows within 12-18 months, making the trajectory of this component in late 2025 and early 2026 critically important for understanding the economy’s direction.

Regional Variations in Consumer Confidence Across the US in 2025

Data Source: Regional Federal Reserve Bank Reports, Conference Board Regional Data, State-Level Consumer Surveys

Regional variations in consumer confidence across the United States in 2025 have been substantial, reflecting localized economic conditions, industry concentrations, and demographic patterns that create divergent experiences even as national-level indices capture aggregate trends. The Southeast region has generally maintained above-average confidence levels throughout 2025, buoyed by continued population inflows from higher-cost areas, robust job growth in manufacturing and logistics sectors, and relatively affordable housing markets compared to coastal metropolitan areas. States like Florida, Tennessee, and the Carolinas have benefited from corporate relocations and expansion projects that have sustained employment optimism even as national labor market indicators have cooled.

In contrast, the West Coast has experienced below-average confidence throughout much of 2025, with California, Oregon, and Washington facing headwinds from technology sector layoffs, extraordinarily high housing costs that strain household budgets, and concerns about state fiscal challenges. The technology industry’s volatility, including continued workforce reductions at major firms and startup funding difficulties, has disproportionately affected this region where tech employment represents a larger share of the economy. The Pacific Northwest specifically faced additional challenges related to Boeing’s ongoing production and quality concerns, which have affected not only aerospace workers but the broader ecosystem of suppliers and related businesses throughout the region.

The Midwest has shown a declining confidence trend in 2025, particularly in states heavily dependent on manufacturing. Uncertainty surrounding tariff policies has been especially acute in this region, where automotive production and related supply chains represent critical employment sectors. Agricultural states within the Great Plains faced additional challenges from commodity price volatility, with farmers experiencing compressed margins due to elevated input costs for fertilizer, fuel, and equipment even as crop prices remained under pressure. Trade policy uncertainty particularly affected agricultural producers who depend on export markets, creating ripple effects throughout rural communities.

The Mid-Atlantic region experienced mixed performance, with areas having high concentrations of federal employment—such as the Washington D.C. metropolitan area, Maryland, and Northern Virginia—facing acute confidence challenges related to the government shutdown that began in October 2025. The furloughing of 750,000 federal workers had outsized regional impacts in these areas, where government employment directly and indirectly supports substantial portions of local economies. Meanwhile, the Northeast generally tracked below national average confidence, reflecting persistently high costs of living, elevated housing expenses, and concerns about state and local tax burdens that constrain household discretionary spending capacity.

The Sun Belt regions, including parts of the Southwest and Southeast, continued benefiting from migration patterns, with population growth supporting construction, real estate, and service sectors. However, even within these generally stronger regions, significant intra-regional variation existed, with energy-producing areas in the Southwest experiencing volatility tied to oil and gas price fluctuations. These regional disparities in consumer confidence underscore the challenge of implementing uniform national policies when economic conditions and consumer sentiment vary so dramatically across geographic areas, and they highlight how local industry composition, cost structures, and policy environments create substantially different economic experiences for Americans depending on where they live.

Housing Market Sentiments and Consumer Confidence in the US in 2025

Data Source: Federal Reserve Bank of New York Survey of Consumer Expectations, Fannie Mae Home Purchase Sentiment Index, Conference Board Consumer Confidence Survey®

Housing market conditions and related consumer sentiments have played a critical role in shaping overall consumer confidence throughout 2025, with affordability challenges creating significant headwinds for both current and prospective homeowners. Home purchasing plans weakened in October 2025, continuing a pattern of cautious sentiment that has characterized the year, even as the broader six-month trend showed some modest improvement from extremely depressed levels earlier in the year. The assessment of buying conditions remained stubbornly negative throughout 2025, with consumers consistently rating current conditions as “poor” due to the combination of elevated home prices, high mortgage rates, and limited inventory in many markets.

Mortgage rate expectations have been a persistent source of concern, with consumers anticipating that borrowing costs will remain elevated well into 2026, constraining affordability for potential buyers. The average 30-year fixed mortgage rate hovered in the 6-7% range through much of 2025, dramatically higher than the sub-3% rates available during 2020-2021 and representing a substantial increase in monthly payment obligations for any given home price. This rate environment has effectively priced many potential first-time buyers out of the market, with first-time buyer sentiment reaching its lowest level since 2022 in the third quarter of 2025. Many younger adults have responded by delaying household formation, with increasing numbers continuing to live with parents or roommates rather than purchasing or even renting their own homes.

Despite challenging conditions for buyers, home price expectations remained positive, with consumers anticipating 3.8% appreciation over the next year as of September 2025 and 3.4% annual growth over the subsequent three years. This expectation of continued price increases, even at a moderated pace compared to the explosive gains of 2020-2022, reflects persistent supply constraints and demographic demand fundamentals that continue supporting home values. However, these appreciation expectations also reinforce affordability challenges, as wages are not keeping pace with housing cost increases.

Rent increase expectations painted an even more challenging picture for non-homeowners, with consumers anticipating 7.0% rent growth over the next year as of September 2025—substantially above general inflation expectations and wage growth prospects. This steep anticipated increase in rental costs has direct implications for household budget strain and discretionary spending capacity, particularly for lower and middle-income consumers who allocate larger shares of income to housing. The divergence between homeowners and renters has become increasingly pronounced, with existing homeowners benefiting from home equity gains and locked-in low mortgage rates from earlier purchases, creating a wealth effect that supports their confidence and spending. In contrast, renters and prospective buyers face deteriorating affordability and diminished confidence in their ability to achieve homeownership.

The housing market’s impact on consumer confidence extends beyond direct shelter costs to broader implications for household formation, geographic mobility, and economic opportunity. Moving plans for the next year remained below historical averages throughout 2025, as the combination of high transaction costs, rate lock-in effects for existing homeowners, and affordability constraints for buyers reduced labor market mobility. This reduced mobility can have negative economic efficiency implications, as workers may be less able to relocate for better employment opportunities. Additionally, declining confidence in housing as an investment vehicle—a notable shift from the previous decade’s strong appreciation—has altered household wealth accumulation strategies and savings behavior. The persistent housing affordability crisis of 2025 represents not just a sectoral challenge but a fundamental drag on overall consumer confidence, as shelter—the largest component of household budgets—becomes increasingly burdensome for millions of Americans.

Consumer Credit and Debt Stress Indicators in the US in 2025

Data Source: Federal Reserve Bank of New York Consumer Credit Panel/Equifax, Federal Reserve G.19 Consumer Credit Report, LendingTree Analysis

Consumer credit conditions and debt stress indicators have emerged as critical factors influencing consumer confidence throughout 2025, with mounting evidence of financial strain particularly among lower-income households and younger consumers. Total household debt reached $18.20 trillion in the first quarter of 2025, representing a 0.9% increase from the fourth quarter of 2024 and a 2.9% year-over-year rise. While this represents the lowest annual growth rate since the first quarter of 2021, the absolute level of debt remains at historic highs. Credit card debt specifically hit $1.233 trillion by the third quarter of 2025, marking an all-time high and surpassing previous peaks, as consumers increasingly relied on revolving credit to maintain spending levels amid persistent inflation.

The most concerning aspect of the credit landscape in 2025 has been the sharp deterioration in delinquency rates across multiple categories. The overall delinquency rate jumped to 4.3% of outstanding debt in some stage of delinquency as of the first quarter of 2025, up from 3.6% in the fourth quarter of 2024. More alarmingly, serious delinquencies—those 90 or more days past due—surged dramatically, particularly for credit cards. The rate of credit card balances 90+ days delinquent reached 12.3% in the first quarter of 2025, representing an 8.5% increase from the fourth quarter of 2024 and the highest level since the first quarter of 2011 during the aftermath of the Great Recession.

The distribution of credit stress has been highly uneven across demographic groups. Consumers under 30 years old experienced serious credit card delinquency rates of 10.3% in the first quarter of 2025, marking a 4.4% increase from a year earlier and reflecting the particular vulnerability of younger borrowers who face challenges from student debt, entry-level wages, and limited credit history. The resumption of student loan payment reporting after pandemic-related pauses caused student loan delinquency rates for those 90+ days past due to spike dramatically from 0.53% in the fourth quarter of 2024 to 7.74% in the first quarter of 2025—the highest level since the start of the pandemic and reflecting significant repayment challenges as forbearance programs expired.

The high-interest-rate environment has compounded debt stress throughout 2025. The average credit card APR for accounts accruing interest rose to 22.83% in the third quarter, while new credit card offers averaged 24.04% APRs as of October 2025. At these elevated rates, carrying balances becomes extraordinarily expensive, with consumers making minimum payments facing decades of repayment periods and thousands of dollars in interest charges. Despite 54% of cardholders paying their balances in full each month and thereby avoiding interest, the remaining 46% who carry balances face mounting financial pressure.

These credit and debt stress indicators have direct implications for consumer confidence and spending behavior. As more households dedicate larger portions of income to debt service, discretionary spending capacity diminishes, constraining economic growth. The rising delinquency rates signal that a growing share of consumers are struggling to meet financial obligations, even as aggregate economic indicators like employment remain relatively stable. This disconnect between macro stability and micro-level financial stress contributes to the persistent weakness in the Expectations Index component of consumer confidence, as individuals experiencing debt difficulties naturally become pessimistic about their economic futures. Furthermore, tightening credit standards in response to elevated delinquencies may constrain future credit availability, creating additional headwinds for consumer spending and confidence in the months ahead.

Stock Market Wealth Effects on Consumer Confidence in the US in 2025

Data Source: Federal Reserve Survey of Consumer Finances, Conference Board Consumer Confidence Survey®, S&P Dow Jones Indices

Stock market performance and associated wealth effects have played a significant yet unequal role in shaping consumer confidence patterns throughout 2025, creating divergent sentiment trajectories across income and wealth levels. The S&P 500 and other major equity indices posted strong gains through much of 2025, with particularly robust performance during the spring and summer months following the temporary trade deal announcement in May. This market strength has disproportionately benefited affluent households with substantial stock market exposure, contributing to the widening confidence gap between upper-income and lower-income consumers observed throughout the year.

The direct impact of stock market movements on consumer sentiment became clearly evident in May 2025, when the trade deal announcement triggered both equity market rallies and confidence improvements. The percentage of consumers expecting stock prices to rise over the next 12 months surged to 44.0% in May from 37.6% in April, while those expecting declines fell to 37.7% from 47.2%. This shift in stock market expectations coincided with the 12.3-point rebound in overall consumer confidence during that month, demonstrating the psychological linkage between equity performance and consumer outlook, particularly among investors.

The wealth effect from stock market gains has been highly concentrated, with households in the top tercile of stock holdings posting an 11% increase in sentiment in November 2025 even as the broader population experienced declining confidence amid government shutdown concerns. This divergence reflects the fundamental inequality in stock ownership, with the wealthiest 10% of households holding approximately 87% of all stocks either directly or through retirement accounts. While roughly 58% of households have some stock market exposure through direct ownership, mutual funds, or retirement accounts like 401(k)s, the magnitude of holdings varies dramatically, meaning market gains provide substantial confidence boosts and spending capacity for the wealthy while offering minimal benefits to middle and lower-income households.

For affluent consumers with substantial equity portfolios, 2025’s stock market performance has provided an important offset to other confidence headwinds. Rising portfolio values have supported luxury spending, high-end real estate purchases, and overall economic optimism among this demographic even as they express concerns about broader economic conditions and policy uncertainty. The positive 401(k) account growth experienced by many workers throughout 2025 has also provided some retirement security confidence, though again with benefits skewed toward higher earners who contribute larger amounts and receive employer matches.

However, market volatility—particularly during the first and second quarters when tariff announcements and trade policy uncertainty triggered significant swings—created periods of investor anxiety that temporarily suppressed confidence even among wealthy households. The VIX volatility index experienced elevated readings during these periods, reflecting heightened uncertainty that tempered the positive wealth effects from overall gains. Additionally, the performance of alternative assets has influenced sentiment, with cryptocurrency market volatility particularly affecting younger investors who have embraced digital assets as part of their portfolios, while real estate investment trust (REIT) performance has had mixed impacts given the challenging commercial real estate environment in certain sectors.

The stock market wealth effect in 2025 has thus served as a double-edged sword for overall consumer confidence—providing significant support for affluent households who drive a disproportionate share of discretionary spending, while simultaneously highlighting and exacerbating economic inequality. The stark contrast between surging confidence among top-tercile stock holders and declining sentiment among lower-income households without substantial market exposure underscores how bifurcated the American economic experience has become, with asset ownership creating fundamentally different economic realities and outlooks across the wealth spectrum.

Purchasing Power Perceptions and Real Income Trends in the US in 2025

Data Source: Bureau of Labor Statistics, Federal Reserve Bank of New York Survey of Consumer Expectations, Conference Board Consumer Confidence Survey®

Perceptions of purchasing power and real income trends have been among the most significant determinants of consumer confidence throughout 2025, with Americans expressing persistent concerns about their ability to afford goods and services despite modest wage growth. While real average hourly earnings have shown modest gains in official statistics through 2025, consumer perceptions tell a different story, with widespread reports of declining purchasing power dominating sentiment surveys and write-in responses. This disconnect between official wage data and lived experience reflects several factors including the sticky nature of inflation in essential categories, geographic variation in cost pressures, and the psychological impact of price level increases versus inflation rate changes.

The erosion of purchasing power has been particularly acute in categories representing non-discretionary household spending. Gasoline price expectations for the year ahead stood at +4.2% as of October 2025, reflecting ongoing concerns about transportation costs that directly affect commuting budgets and broader economic activity. Food price expectations reached +5.8% in September 2025, the highest level since March 2023, as grocery bills continued climbing and eating out became increasingly expensive. These essential spending categories consume disproportionate shares of lower and middle-income household budgets, meaning inflation in these areas has outsized impacts on perceived financial wellbeing and constrains spending capacity in discretionary categories.

The gap between expected income growth and inflation expectations has been a persistent source of consumer pessimism in 2025. With one-year earnings growth expectations at just 2.6% in October while inflation expectations across various categories ranged from 3% to 6% or higher, consumers anticipate that their incomes will not keep pace with rising costs, resulting in continued purchasing power deterioration. This expectation naturally suppresses consumer confidence and spending intentions, as households become more cautious about major purchases and discretionary expenditures when they anticipate financial conditions worsening.

The impact on actual financial conditions has been measurable, with a rising percentage of consumers reporting their current financial situation as “worse” compared to a year ago, particularly in November 2025 as government shutdown effects compounded existing challenges. Throughout the year, consumers have consistently characterized current conditions as a “bad time to buy” major household items, automobiles, and homes, reflecting both affordability concerns and value-consciousness as they perceive prices as elevated relative to their income capacity. This spending hesitation, even among consumers who remain employed and financially stable, has represented a significant drag on economic activity.

The savings landscape has also reflected purchasing power pressures, with the household savings rate showing a declining trend through 2025 as consumers drew down accumulated pandemic-era savings to maintain consumption levels amid income-expense mismatches. Many households report emergency fund adequacy below the recommended three-to-six months of expenses, creating financial vulnerability and contributing to anxiety about unexpected costs or income disruptions. The depletion of savings buffers that had provided confidence during the post-pandemic recovery has left households feeling more exposed to economic shocks.

Perhaps most significantly, cost of living concerns have emerged as the dominant theme in consumer confidence surveys throughout 2025, consistently ranking as the top worry across all demographic groups. Write-in responses to surveys are dominated by references to high prices, inflation, and affordability challenges, with consumers expressing frustration that despite economic recovery and low unemployment, their day-to-day financial experience feels increasingly strained. This persistent focus on purchasing power erosion, even as inflation rates have moderated from pandemic peaks, underscores how price level changes create lasting impacts on consumer psychology and confidence that persist long after inflation rates themselves have declined. The purchasing power perception problem of 2025 represents one of the most fundamental challenges to restoring robust consumer confidence, as improvements require not just moderating inflation rates but actual price reversals or substantial wage acceleration—neither of which has materialized sufficiently to alter consumer sentiment.

Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.

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