Even Before the Tariffs, Cracks Were Appearing in Consumer Confidence

In February 2025, before the most recent events that are roiling global trade, we surveyed consumers to get a measure of their sentiment about spending. Even then, we found cracks appearing in an otherwise solid forecast for continued consumer spending. Consumer attitudes about the general economic situation had begun to shift in February. We detected:

• A slowdown in intended spending by lower-income households
• Growing anxiety about tariffs

Our latest consumer survey found that economic shocks affect consumer sentiment, but negative sentiment doesn’t necessarily mean a universal drop in spending—at least not immediately. Bear in mind that our February survey also found that consumers said they expected to spend more over the coming six months because . . . they just want to, which is consistent with what we’ve seen in the past. What happens in terms of spending will vary by situation, by country, and by category, so pockets of growth remain to be tapped by manufacturers and retailers that understand market dynamics and meet consumer needs. (See “About Our Research.”)

The State of the Nations

Consumers expressed widely divergent views of the economic situation in their countries over the next five years as well as different outlooks regarding their personal finances over a six-month window.

Those in China and India were notably more bullish about their economic situation than consumers elsewhere, anticipating good times ahead. And when it came to sentiment about their personal finances, consumers in China and India felt better than they did six months ago.

Sentiment about personal finances over the next six months had dropped off most sharply among US consumers. Their outlook for the economy in general over the next five years was evenly divided between anticipating continued good times and expecting periods of widespread unemployment and depression. Consumers in Brazil were also divided in their five-year outlook, but while US consumers’ sentiment about their personal finances over the next six months plunged, that of Brazilian consumers improved slightly.

Most consumers in the European nations we surveyed and in Japan were pessimistic about the general outlook over the next five years. The change in their sentiment about their personal finances over the coming months, relative to six months prior, varied country by country.

Despite the mixed feelings about personal finances, consumers overall signaled an intent to continue spending, in part because of anticipated inflation but also for discretionary, “feel good” reasons: they wanted to treat themselves, for instance.

The Shocks to the System

Despite these positive signals, spending had already started to retreat among lower-income households. We found that this group planned to slow spending in the coming months and in some cases even to reduce it. That marked a shift from previous periods and suggested that unease was beginning to color consumer sentiment.

Another shock to consumer confidence was the anticipated impact of tariffs, which elicited negative responses from most consumers, in all countries surveyed.

At the time of our survey, most consumers said they believed the various recently imposed and evolving tariffs would worsen inflation and hurt their economies, not help them. However, consumers in China and India, while acknowledging the short-term impact on prices, believed that their countries would benefit from the tariffs in the long run.

Interestingly, most consumers who supported tariffs said they felt confident about their country’s economy but were also relatively anxious about their personal finances. Meanwhile, those who opposed tariffs often felt more personally secure—and they were more likely to say that they planned to increase spending in the next six months.

The greatest polarization we saw was in the US. We also found a recent progression of negative sentiment about tariffs and pessimism about the general economic outlook in the US. After our February 2025 survey, we conducted an additional survey in March 2025 to assess the more recent attitudes of consumers in the US, Canada, and Mexico toward tariffs. Canadian respondents expressed the most negative opinions about the impact of tariffs.

The Impacts by Category

Consumers were still prioritizing essentials and high-value purchases like cars and auto and property insurance.

Certain other categories are more discretionary in nature; consumers continued to indicate that these categories (dining and snacks among them) are lower priorities and thus are more vulnerable to a decline in spending.

These trends are generally consistent over time and across income groups.

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Even where consumers, categories, and countries seem to be at a tipping point—where spending might plateau or plummet—companies are advised to look closely, country by country and category by category, to see how consumers are feeling and acting. Look closely at how consumers might react to shocks. Consider whether the cracks we’ve detected are harbingers of a larger break in consumer sentiment and the spending trend.

Meanwhile, our global consumer sentiment surveys and analyses will continue to track sentiment across markets, categories, regions, and income segments to inform companies in this space.

The authors thank Joanna Stringer, Cinthia Chen, Kanika Sanghi, Amanda Barros, Lilian Cheong, Tim Schulz van Endert, Laura Togut, Saurabh Chaddha, and Sofia Aguilar, as well as Tomas Andor and Oliver Toman from NativeResearch for their contributions.