A dip in consumer spending and confidence in February 2025 has prompted retail and logistics experts to warn industry stakeholders to continue preparing for an economic contraction.
Both the National Retail Federation (NRF) and The University of Michigan’s Index of Consumer Sentiment reported declines in the two categories in February.
NRF President and CEO Matthew Shaw attributed the decline in consumer spending to “harsh winter weather and weakening consumer confidence due to tariffs, rising unemployment concerns, and policy uncertainty.”
Though the Consumer Price Index reported in March 2025 that inflation slowed 3 percent in January, overall inflation was up 2.8 percent year over year in February, and the University of Michigan’s Index of Consumer Sentiment, which has monitored trends in U.S. consumer perspectives for 75 years, said it found consumers were fearing inflation at slightly higher rates than before. The index attributed this uptick to consumers feeling “substantial uncertainty, particularly in light of policy changes under the new presidential administration.”
Conumer Price Index Director Joanne Hsu said consumers across various age groups, income, and wealth distributions were feeling less confident about the American economy.
She noted that the durables sector, which includes automobiles, furniture, machinery, and other items that are used for a long period of time before replacement, had seen “a 19 percent plunge in buying conditions … in large part due to fears that tariff-induced price increases are imminent.” Durable goods are considered a key economic indicator because they tend to be costly, and because they are the kinds of purchases that individuals and businesses will skip making when they are facing financial pressure and make more frequently when they are feeling financially comfortable. For this reason they give investors a view into the financial health and confidence of individuals and businesses.
In her summary of the results of the February survey, Hsu said that the decrease in consumer sentiment …
