The CB Consumer Confidence index, a key gauge of US household sentiment, fell to 88.70 in November 2025, the lowest level since April 2025’s 86. This decline signals growing caution among consumers amid persistent inflationary pressures and geopolitical uncertainties. The index remains below the 12-month average of 93.70, reflecting a softening in optimism compared to earlier in the year when confidence peaked at 104.10 in January.

Drivers this month

• Rising inflation concerns, especially in energy and food prices, weighed heavily on sentiment.
• Labor market uncertainty, despite steady job growth, contributed to cautious consumer outlooks.
• Geopolitical tensions in Eastern Europe and Asia increased risk aversion among households.

Policy pulse

The reading sits below the Federal Reserve’s comfort zone for consumer confidence, signaling potential headwinds to consumption-driven growth. The Fed’s ongoing restrictive monetary policy, with the federal funds rate near 5.50%, aims to tame inflation but may be dampening consumer spending power.

Market lens

Immediate reaction: US Treasury yields on the 2-year note rose 6 basis points, reflecting increased expectations of prolonged Fed tightening. The US dollar index (DXY) strengthened by 0.30% as risk sentiment softened.

Consumer confidence is a bellwether for US economic activity, closely linked to spending, which accounts for roughly 70% of GDP. The November reading’s decline aligns with recent softening in retail sales growth, which slowed to 0.20% MoM in October from 0.50% in September. Inflation remains sticky, with the Consumer Price Index (CPI) at 4.10% YoY, well above the Fed’s 2% target.

Monetary Policy & Financial Conditions

The Federal Reserve’s restrictive stance, with a terminal rate expected near 5.75%, has tightened financial conditions. Credit spreads have widened modestly, and mortgage rates hover above 7%, constraining housing affordability and dampening wealth effects.

Fiscal Policy & Government Budget

Fiscal stimulus has been limited in 2025, with government budget deficits narrowing to 3.20% of GDP, reducing direct support to households. The absence of fresh fiscal measures may be contributing to the cautious consumer mood.

Market lens

Immediate reaction: The S&P 500 index fell 0.80% in the hour following the release, reflecting investor concerns over weaker consumer demand. The US dollar index (DXY) gained 0.30%, while the 2-year Treasury yield rose 6 basis points, signaling expectations for sustained Fed tightening.

Looking ahead, consumer confidence will be shaped by inflation trajectories, labor market resilience, and geopolitical developments. Three scenarios emerge:

Bullish scenario (25% probability)

• Inflation moderates faster than expected, easing cost pressures.
• Labor market remains robust, supporting wage growth and spending.
• Geopolitical tensions ease, restoring risk appetite.
• Consumer confidence rebounds above 95 by Q1 2026, supporting GDP growth near 2.50%.

Base scenario (50% probability)

• Inflation declines gradually but remains above target.
• Labor market softens modestly but avoids recession.
• Geopolitical risks persist at moderate levels.
• Confidence stabilizes around 90-92, with GDP growth slowing to 1.50-2%.

Bearish scenario (25% probability)

• Inflation remains sticky, forcing further Fed hikes.
• Labor market weakens sharply, increasing unemployment.
• Geopolitical shocks escalate, disrupting trade and energy markets.
• Confidence falls below 85, risking recession and GDP contraction.

Policy pulse

Monetary policy will remain data-dependent, with the Fed closely monitoring consumer sentiment as a leading indicator of spending. Fiscal policy is unlikely to provide significant stimulus in the near term.

The November 2025 CB Consumer Confidence index signals a cautious US consumer base amid persistent inflation and geopolitical uncertainty. The sharp decline to 88.70, below expectations and recent averages, suggests consumption growth may slow in coming quarters. Monetary tightening and limited fiscal support compound downside risks. However, a resilient labor market and potential easing of external shocks could stabilize sentiment. Investors and policymakers should watch this indicator closely as a barometer of economic momentum and risk appetite.

Key Markets Likely to React to CB Consumer Confidence

Consumer confidence strongly influences US equity markets, fixed income, and the US dollar. The following tradable symbols historically track or react to shifts in this indicator:

• SPX – S&P 500 index, sensitive to consumer spending trends.
• USDJPY – US dollar vs Japanese yen, reflects risk sentiment and Fed policy.
• AMZN – Amazon, a retail bellwether tied to consumer demand.
• BTCUSD – Bitcoin, often reacts to shifts in risk appetite and liquidity.
• USDCAD – US dollar vs Canadian dollar, influenced by commodity prices and US economic health.

FAQs

What is the significance of the CB Consumer Confidence index?

The CB Consumer Confidence index measures US household sentiment about the economy, influencing spending and growth forecasts.

How does consumer confidence affect monetary policy?

Lower confidence can signal weaker spending, potentially prompting the Fed to adjust interest rates to support growth or control inflation.

What are the risks to the US economy from declining consumer confidence?

Falling confidence may reduce consumption, slowing GDP growth and increasing recession risks if sustained.

Key takeaway: The November 2025 drop in US consumer confidence highlights growing economic caution, suggesting slower growth ahead amid persistent inflation and geopolitical risks.