American Consumers’ Financial Confidence in an Uncertain Era

With the first quarter of 2025 fully in the rearview mirror, Americans have moved from a pandemic economy to record inflation and are now in the middle of a new tariff regime, which is causing massive fluctuations in the market and creating business uncertainty. Even while price pressures eased from all-time highs, economic unease lingers. In this evolving landscape, understanding how Americans view their own financial situations and how these views intersect with identity, income, and party affiliation is an important piece of the puzzle for organizations to pick a successful path forward.

Additional unknowns looming on the horizon also muddy the waters, with the Trump Administration’s tariff policy adding another element of uncertainty: the prospect of upsetting supply chains, prices, and overall consumer attitudes. The effects of these tariffs, or even simply the threat of tariffs, on how consumers are feeling tend to be a lagging indicator and are likely not to be fully reflected in the consumer data so far. Their growing significance, however, will likely reframe economic opinion going forward, contributing to yet more uncertainty in an already unsettled environment.

With that being said, the data around consumer sentiment is already volatile, and it feels likely to continue this way for a while.

The Economy Overall

Americans headed into the new year worried about their own financial situations, but data points to a brief surge in optimism mid-winter. In January, worry dominated, with 37% of Americans saying they felt less secure about their finances and just 20% who said they felt more secure. In February, optimism returned: nearly one-third (32%) said they felt more secure, while slightly fewer Americans 30%) said they felt less secure. This enthusiasm shift was mostly among Republicans and some Independents following Inauguration Day. However, by March, that confidence started fading. The percentage who felt more secure dropped to 30% (-2%), while those who felt less secure rose to 35% (+5%). A similar concentration (32%) reported feeling the same.

This brief jump in positivity was perhaps heightened by the new administration and early policy pronouncements around tax cuts, but events fueling uncertainty, such as the daily changing policies around tariffs and the whipsaw action of the stock market, seemingly began to erode that confidence. Rather than renewed confidence in a strong recovery, American perceptions of the economy reflect growing unease. Initial optimism at the start of the year has faded, giving way to renewed concerns by the end of the first financial quarter, as the data points to an economy still on unsteady footing.

Income Differences

Unsurprisingly, Americans’ annual income levels have an impact on how they view the economy, and these differences contributed to these shifts in economic perspectives early in the year.  Americans earning $80,000 or more are still the most likely to feel that they are better off compared to one year ago (49%), a significant increase from 34% in January. Americans earning between $40,000 and $80,000 have also made progress, with 31% reporting in March that they are better off, compared to 18% in January. While Americans with incomes under $40,000 are still the most likely to report being worse off compared to last year (43%), this group has shown an increase in optimism, with 21% feeling better off in March compared to 16% in January. The percentage of people who say they are “about the same” is fairly consistent across income levels.

A key caveat is emerging: the March trendline shows a softening of economic optimism across all income levels compared to February. While most Americans still report being better off than in January, the February bounce has faded amid growing uncertainty. Some things remain consistent, however; lower-income earners remain the most likely to feel worse off, higher-income earners the most likely to feel better, and the share reporting “about the same” remains steady across groups.

Breaking these feelings down by other demographics, we find that the way Americans view their own economic condition also differs by race/ethnicity, age, and gender. When looking at race, Black Americans are more likely to feel better off (38%), while Hispanic Americans are more likely to feel their economic status is about the same (42%). White Americans have the highest concentration of those who feel they are worse off (43%).

Looking at gender, women are more likely to indicate they feel worse off (43%) than men (28%), who are more likely to report they’re better off (38% vs. 23% for women). Younger Americans, or those under the age of 45, are the most positive, with 46% reporting being better off, while older Americans (65+) say they feel worse off compared to a year ago (46%). Americans in the middle-aged bracket are slightly more likely to agree that they feel worse off (48%).

Looking at the financial mood in a different way, when we ask how often consumers feel positive and negative about their financial situation, Americans showed a balanced but varied distribution of sentiment. While positivity edges out negativity slightly, the spread is fairly even. A significant portion (19%) report feeling very positive, with 80-100% of their time spent in a positive state, while another 19% report a more moderate level of positivity, feeling positive 60-79% of the time. All in all, this means just 38% of Americans feel positive about their financial situations a majority of the time.

On the flip side, 15% of Americans feel very negative, spending 80-100% of their time with negative feelings, and another 19% feel negative 60-79% of the time (34% combined). The rest of the population falls somewhere in the middle, with roughly 30% feeling positive and negative about equally (40-59% of the time for both). This distribution shows that while many Americans experience strong emotions about their finances, the vast majority are somewhere in the middle of the two extremes.

Inflation and Recession Fears

Economic issues like inflation remain a strong factor in public opinion, as illustrated in the figure below. Although other economic variables, such as employment growth and stock market performance, are also at play, inflation was a leading factor in shaping attitudes during the Biden administration, especially leading up to last year’s general election. Over the last year, inflation concerns have ebbed and flowed, with recent readings indicating a slight increase from earlier in the year.

Average concern over inflation has waffled slightly over the past two years; although it is higher now than it was this time last year (74 vs. 73 out of 100), it remains lower than it was at its peak of 76 back in April 2023.

Unlike concerns around inflation, fear of a recession tends to be steadier. In April of last year, the average level of concern about a recession stood at 60 out of 100 and remained relatively consistent throughout the rest of the year and the first quarter of 2025, never dipping below 59.5 or rising above 60.01. Since the end of April 2025, the average concern has continued to hover right around 60 out of 100.

This kind of evenness in response to economic perceptions, neither peaking in fear nor bottoming out in complacency, suggests that Americans have developed a kind of psychological muscle memory around economic uncertainty. Recession fear is no longer making major headlines, but it never fully disappears either. It’s instead become a background hum: constantly present, shaping decisions and perceptions even when there is no immediate crisis. Even this national state of vigilance is barely constant. As with nearly all economic sentiment in an election year, views diverged sharply along political lines.

For a while, partisanship has reached the core of how Americans interpret economic signals. While recession anxiety can be flat or unchanging on a nationwide basis, breaking it down by party affiliation reveals a stark narrative of how people internalize and project risk. To some, recession is an imminent threat associated with dissatisfaction with the current government; to others, it’s a distant possibility, buffered by faith in institutional strength. The following graphs make it clear: financial strain in 2025 is as much about identity and narrative as it is about financial data.

Inflation continues to be a primary concern for the majority of Americans; further, recent data show that attitudes towards it have become increasingly aligned within the major political parties or alignments. Independent voters rate their concern about inflation moderately high at 73 out of 100, similar to the overall average of 74, while Republicans and Democrats are similarly close at 72 and 76 out of 100, respectively. This relatively modest 4-point gap is a significant contrast to May 2024 levels, when Democrats and Republicans had a 19-point gap between them (63 and 82, respectively). While inflation has been a politically divisive topic for a long time, the narrowing gap between the two major party affiliations suggests a potential trend towards more cohesive public opinion, with concern now being split relatively evenly across the political spectrum.

Turning back to concerns about recessions shows that differences in opinion along party lines persist, although the gap has also closed in recent weeks. Republicans and Independents continue to be more likely to rate their concern over a recession higher than Democrats, although at a lesser rate (providing averages of 62 out of 100 each, compared to 56 for Democrats). While still greater than the current partisan gap over inflation (only 4 points), the gap has been mostly shrinking over the past year. In April of 2024, Republicans’ concern stood at 64 points and Democrats at 56, an eight-point difference. The smaller spread likely points to a lack of politicization of the word “recession,” a topic most politicians avoid like the plague, as compared to “inflation,” which was a big focus of the 2024 cycle.

As Americans navigate an economy recovering from record-high inflation and a major global pandemic, Trendency’s latest data makes one thing clear: demographics have a big effect on how people view the economy, with partisanship becoming an increasingly powerful lens through which economic realities are interpreted. While deep ideological divides persist, especially around topics like recession risk, we’re also seeing areas of growing alignment, particularly in inflation-related concerns. The political landscape in 2025 is defined less by campaign rhetoric and more by how Americans internalize economic change in the moment: balancing lived experience, party affiliation, and a cautious look at the future.

In a time when financial confidence wavers between strength and weakness, capturing these nuanced attitudes will be the key to interpreting public sentiment and the policies that result. Uncertainties like new tariffs, stock market volatility, and ongoing political shifts suggest that Americans’ financial confidence may continue to rest on shifting sands rather than solid ground.