U.S. consumer confidence fell significantly in November, reaching 88.7 as reported by the Conference Board on November 25, 2025. This marked the index’s second-lowest reading since April and fell short of forecasts at 93.5. The decline reflects growing consumer worry about a weakening labor market and stagnant wage growth, factors that could influence the Federal Reserve’s upcoming monetary policy decisions.

Confidence Wanes Across Income Groups Amid Economic Unease

The Conference Board’s November survey showed consumer confidence retreating across nearly all income groups following several months of improvement. Households earning under $15,000 annually remained the least confident, although this bracket was the only one to record a minor boost this month. This pattern aligns with the so-called “K-shaped” economic recovery narrative, in which higher earners remain more optimistic and supportive of the economy through stronger spending, while lower-income groups lag behind.

Consumers’ open-ended responses frequently cited concerns about inflation, tariffs, trade tensions, and ongoing political disruptions. The prolonged federal government shutdown, which concluded earlier in November, was mentioned repeatedly, contributing to the pessimistic sentiment. Dana Peterson, Chief Economist at the Conference Board, noted that the tone of November’s write-ins grew more negative compared to October, illustrating widespread uncertainty among Americans.

Market Dynamics and Policy Implications of Falling Consumer Confidence

For the fourth consecutive month, the percentage of consumers who believe the U.S. economy is currently in a recession increased. Yet, fewer respondents view a recession as “very likely” within the next year, indicating a nuanced economic outlook. Meanwhile, consumers’ plans for major purchases over the next six months declined in November, with several retailers warning of cautious spending heading into the holiday season amid unclear job market prospects.

This decline in confidence complicates the Federal Reserve’s decision-making ahead of its final interest rate meeting in December. Reports suggest a divide among Fed officials between those favoring rate cuts to stimulate hiring and others preferring to hold rates steady until more current economic data becomes available following the government shutdown’s information gap. The subdued consumer confidence is expected to strengthen calls for monetary easing to support the broader economy.

Confidence: Market Outlook

The November drop in U.S. consumer confidence to 88.7 underscores growing apprehension among Americans regarding labor market conditions and wage stagnation. With this indicator now near its lowest level in seven months, markets and policymakers are poised for heightened scrutiny of upcoming economic data and Federal Reserve policy moves. This shift in consumer sentiment signals a critical juncture that could impact economic momentum as 2025 concludes.