U.S. Economy Braces for 2.8% Q1 Contraction as Consumer Confidence Hits 12-Year Low

Rising savings rates, slowing spending, and tariff-driven inflation fears signal mounting economic strain.

Consumer confidence has fallen to its lowest level since 2013, with widespread economic concerns across all demographics.
February consumer spending rose just 0.1% after a sharp 0.6% decline in January, highlighting a significant slowdown in economic activity.
The personal savings rate climbed to 4.6% in February, the highest since mid-2024, reflecting cautious consumer behavior.
Major companies like FedEx, Delta, and Walmart have lowered earnings forecasts due to declining demand and economic uncertainty.
Economists project a 2.8% contraction in the U.S. economy for Q1 2025, driven by reduced consumer spending and tariff-related pressures.