April 29 (UPI) -- A global trade war and inflation concerns have caused U.S. consumer confidence to reach its lowest level since May 2020, according to The Confidence Board.
The board's latest consumer confidence index dropped 7.9 points to 86 in April after declining over the past five months.
"Consumer confidence declined ... to levels not seen since the onset of the COVID pandemic," said Stephanie Guichard, senior economist of global indicators at The Conference Board.
"The decline was largely driven by consumers' expectations," Guichard said.
Related
"The three expectation components -- business conditions, employment prospects and future income -- all deteriorated sharply, reflecting pervasive pessimism about the future."
The decline in consumer confidence fell the most among those between ages 35 and 55 and among consumers whose households annually earn more than $125,000 in combined income.
People of all political affiliations shared the decline in consumer confidence.
The nation's expectations index declined at a faster rate after dropping 12.5 points to 54.4, which is the lowest since October 2011.
The current level is significantly lower than the 80-point threshold that The Confidence Board says indicates a recession lies ahead.
Consumer spending accounts for about 70% of the nation's economic output, CNN reported.
President Donald Trump's tariffs policy and subsequent trade wars have raised alarm among consumers and Wall Street investors.
Consumer pessimism could lead to reduced spending, which could negatively affect stock markets, business profits and employment levels.
"There's lots of reasons to be worried about consumer spending," Richmond (Va.) Federal Reserve President Thomas Birkin told media and others last week.
"Consumer sentiment has dropped ... pretty significantly over the last couple months," Birkin said, "and consumers seem to be more worried about inflation and worried about losing their jobs."
The Confidence Board was founded in 1916 and is an independent, non-partisan and non-profit think tank focused on delivering insights that help its members make meaningful changes to better serve society through sustainable capitalism.
