Trump's economic policies scare American consumers

US consumer confidence fell the most in three and a half years in February as expectations for inflation over the next 12 months soared, the Conference Board said on Tuesday. The reason? Fears about the impact of US President Donald Trump's policies on the economy.

In the report, the Conference Board notes that "comments about the current Administration and its policies dominated the responses." The confidence index fell seven points to 98.3 points, the biggest drop since August 2021, when the country was still dealing with the COVID-19 pandemic. This was the third consecutive monthly decline and puts the indicator at its lowest point since June last year.

The tariffs that Trump has already imposed or plans to impose are the top issue in virtually every survey of households and businesses, Reuters reports.

But there is another factor increasingly weighing on the pessimism of US citizens: the mass layoffs of public employees, which could threaten domestic consumption, the main driver of the world's largest economy.

"Americans are increasingly pessimistic about what lies ahead. No federal government has ever threatened its workers with mass layoffs before, and that is starting to scare consumers a lot," Christopher Rupkey, chief economist at FWDBONDS, told Reuters. "The economy could stall in the first quarter of this year if consumers stay home."

“There has been a sharp rise in references to trade and tariffs, to a level not seen since 2019,” said Stephanie Guichard, senior economist at the Conference Board.

Trump’s victory in the November 5 election sent business and consumer confidence soaring that month, with expectations of easing regulations, tax cuts and lower inflation. But the tariffs announced by the president, as well as the job cuts promised by Elon Musk, head of the Office of Government Efficiency (DOGE), quickly led to a decline in confidence levels.