Consumer confidence across California has plummeted to its lowest level since the early days of the COVID-19 pandemic, mirroring a broader nationwide downturn in sentiment driven by fears over inflation, job losses, and prolonged economic instability.
According to new data released by The Conference Board, the national Consumer Confidence Index® dropped by 7.9 points in April to 86.0—its lowest reading in over four years. The Expectations Index, which gauges consumers’ short-term outlook for income, business, and labor conditions, fell sharply to 54.4. That marks its weakest level since October 2011 and sits well below the threshold of 80, which is typically associated with impending recessions.
“The three expectation components—business conditions, employment prospects, and future income—all deteriorated sharply, reflecting pervasive pessimism about the future,” said Stephanie Guichard, senior economist for Global Indicators at The Conference Board, attributing the decline primarily to deteriorating expectations.
While assessments of present conditions held relatively steady—with the Present Situation Index slipping only 0.9 points to 133.5—the downturn in expectations suggests growing concern among consumers that economic hardship may lie ahead.
Alarmingly, the percentage of consumers expecting fewer jobs in the next six months surged to 32.1%, a level not seen since the depths of the Great Recession in 2009.
This bleak outlook is particularly evident in California, where affordability challenges and labor market concerns continue to weigh heavily. The California housing market, despite an increase in supply, remains out of reach for many.
According to a recent report from the California Association of Realtors (CAR), only 18% of Californians could afford the median-priced single-family home in 2024, down from 19% in 2023, according to statewide affordability figures. Stark disparities persist along racial lines: only 9% of Hispanic/Latino and 10% of Black households met the income requirements needed to afford the average $865,440 home, compared to 27% of Asian and 21% of White households, said the CAR report.
At the national level, the labor market remains a mixed bag. Initial jobless claims edged up slightly to 222,000 in mid-April, but continuing claims declined to 1.84 million, reflecting some resilience. Still, uncertainty is mounting amid fresh tariff hikes and global trade tensions, which have slowed business investment in key sectors such as manufacturing and retail.
Firms are reportedly pausing hiring and initiating layoffs, according to the Federal Reserve’s latest Beige Book.
At the same time, the University of Michigan reported an 8% decline in its consumer sentiment index for April, bringing it to a near-historic low of 52.2. That figure spans all demographics and income levels but is particularly acute among middle-income households. With consumer spending accounting for nearly 70% of the U.S. economy, analysts warn that a pullback in household expenditures could trigger broader slowdowns in economic growth.
As both Californians and consumers nationwide confront economic headwinds—from volatile trade policy to housing pressures and weakening job prospects—the continued erosion of confidence suggests turbulence ahead for the second half of 2025.
