Consumer Concerns for 2025: Focus on Jobs and Inflation

Consumer caution is on the rise as Donald J. Trump embarks on his second term as president. Since taking office on January 20, Trump has signed 37 executive orders, including measures to withdraw the U.S. from the Paris climate accord, implement an America First Policy, and strengthen border security. However, there remains uncertainty about his strategy for tariffs on imported goods.

A study conducted by the National Retail Federation and Trade Partnership Worldwide LLC projected that American consumer spending power could decrease by $46 billion to $78 billion annually due to tariffs on six product categories, including apparel and footwear. Tariffs were a central component of Trump’s campaign agenda, with talks of potentially imposing a broad-based levy on all imported goods to promote domestic manufacturing, impacting various consumer goods beyond just apparel and footwear.

Consumer apprehension is reflected in worries about job security and inflation. The latest Conference Board’s Consumer Confidence Index showed a decline in consumer confidence for January, with a 5.4-point drop to 104.1. Both components of the Index, including the Present Situation Index and the Expectations component, saw decreases. The Present Situation Index plummeted by 9.7 points to 134.3, while the Expectations component, which gauges the short-term outlook six months ahead, declined by 2.6 points to 83.9.

These factors have led to increased caution among consumers, who are closely monitoring economic developments as Trump’s policies unfold. The potential impact of tariffs on imported goods is a significant concern, as it could lead to higher prices for consumers and strain their spending power in the long run. As the administration navigates trade policies and economic strategies, consumer sentiment will continue to be shaped by the evolving landscape of U.S. trade relations.

The uncertainty surrounding Trump’s approach to tariffs and trade agreements has left many consumers anxious about the future economic landscape. With job security and inflation at the forefront of consumer concerns, navigating the implications of potential tariffs on imported goods remains a pressing issue for policymakers and industry stakeholders alike. As consumer confidence fluctuates in response to changing economic conditions, the retail sector and other industries are bracing for potential shifts in consumer spending patterns and overall market dynamics amidst evolving trade policies.