Economic optimism among American consumers took a significant hit in December, plunging to its weakest level since the initial rollout of major import tariffs earlier in the year.
Key Index Records Steep Decline
The closely watched Consumer Confidence Index, published by The Conference Board, dropped by 3.8 points to 89.1 for the month of December. This follows a revised November reading of 92.9. The latest figure is now alarmingly close to the 85.7 recorded in April 2025, the period when President Donald Trump first implemented sweeping tariffs on key US trading partners.
Persistent Anxiety Over Prices and Policy
According to the survey data released on Tuesday 23 December 2025, the primary drivers of the downturn remain stubbornly high living costs and ongoing concerns about the impact of federal trade policy. In written responses, participants consistently cited prices, inflation, and tariffs as their foremost economic worries.
A measure assessing consumers' views on their present situation experienced a particularly sharp fall, tumbling 9.5 points to 116.8. Meanwhile, the sub-index tracking short-term expectations for income, business conditions, and the labour market held steady at 70.7.
Recession Warning Signal Continues
Despite stability in the expectations gauge, it marks the 11th consecutive month the reading has remained below 80. Economists frequently view a sustained figure beneath this 80-point threshold as a potential precursor to a future recession.
The cumulative data paints a clear picture of a cautious American public, grappling with the tangible effects of inflation and uncertain about the long-term trade landscape shaped by the current administration's policies.
