US consumer confidence improved slightly in February after collapsing the previous month, the Conference Board reported Tuesday, though Americans remain deeply anxious about their economic prospects as job growth stumbles and tariff uncertainty freezes business hiring.
The modest rebound masks persistent weakness in consumers’ short-term economic outlook, which has remained well below the 80-point recession-warning threshold for the 13th consecutive month as businesses navigate tariffs and elevated interest rates while job growth trails productivity gains by a significant margin.
A fragile rebound
The Conference Board reported Tuesday that its consumer confidence index rose to 91.2 in February, an improvement from January’s 89. Yet the rebound masks deeper anxieties: a measure of Americans’ short-term economic expectations—accounting for expected income, business conditions, and the job market—climbed only 4 points to 72, well below the 80-point threshold that historically correlates with recession risk.
For the 13th consecutive month, the index has remained below that signal level, a sustained indication of household unease stretching back into late 2024. Meanwhile, consumers’ assessment of their current economic situation actually declined 1.8 points to 120, a divergence suggesting Americans believe conditions may worsen before they improve.
Tariffs and hiring freezes dominate concerns
Survey respondents’ mentions of trade and politics increased in February while inflation references remained elevated despite showing little month-to-month change. Tariff uncertainty and political developments weigh heavily on household finances.
The labor market has entered what economists describe as a “low hire, low fire” state—a cautious equilibrium where businesses are neither expanding headcount nor cutting it sharply. The hesitation stems from two pressures: uncertainty over Trump administration tariff threats and lingering drag from interest rates that remain elevated compared to pre-2022 levels.
Employers added 130,000 nonfarm jobs in January, a stronger-than-expected figure. But the year-long trend tells a different story. The economy added 584,000 jobs across 2025—roughly one-fourth the 2 million-plus jobs added in 2024. Yet job growth slowed even as GDP grew, a gap households are noticing in their survey responses.
Growth stumbles, big-ticket hopes rise
US economic growth slowed to 1.4% in the fourth quarter of 2025 after a six-week federal government shutdown and pullback in consumer spending drained momentum. The quarter followed stronger readings of 4.4% in July-September and 3.8% in the prior quarter.
Consumers nonetheless indicated plans to increase purchases of big-ticket items over the next six months, with used cars, furniture, televisions, and smartphones leading the way. Home-buying expectations, by contrast, remained little changed—a reflection of the depressed housing market, which has endured a yearslong slump.
The February data captures a consumer navigating competing signals: economic growth that defies recession, job gains that have slowed sharply, tariff uncertainty that chills business investment, and interest rates that remain a headwind on borrowing. The modest confidence improvement may be less a vote of optimism than a sigh of relief that January’s steeper decline did not continue.
Generated under CC0. Main Street Independent methodology.