Consumer Confidence Takes a Hit

Recent volatility in the economy and the stock market, driven by tariffs and mass layoffs, has led to a plunge in consumer confidence. In fact, consumers feel nearly 8% less confident about their financial outlook this month than they did one year ago, according to the latest WalletHub Economic Index. This drop is so severe that consumer sentiment is now at its fourth-lowest point in the past five years.

"The nearly 8% decrease in consumer sentiment over the past year is a worrying sign that our economic recovery may be stalling, and it demonstrates that people are not optimistic about their financial future," said Chip Lupo, WalletHub analyst. "People who have low financial confidence are likely to spend less money, make fewer large purchases, and pay down less debt than people with high confidence. As a result, when consumer sentiment experiences a significant decrease, that is negative for the economy."

The WalletHub Economic Index is based on a monthly survey that evaluates economic prospects based on 10 components of consumer sentiment. These components revolve around how people feel about their finances, purchasing plans, and employment opportunities.

Key stats include: 

• Decreasing interest in auto purchases. The share of consumers who expect to buy a car in the next six months is more than 13% lower in April compared to last year.
• Real estate popularity drop. Home-buying interest among consumers decreased by more than 10% in April compared to last year.
• Large purchases are not a priority. In April, consumers' likelihood of making a large purchase in the next six months is nearly 10% lower than last year.
• Decrease in debt-reduction confidence. The share of consumers who expect to have less debt after the next six months is roughly 4% lower in April compared to last year.