Optimism for the future is fading as consumer confidence crumbles: 9 facts from new report

Yahoo

03-06-2025

HONOLULU (KHON2) — Consumer confidence is sliding, and fast. According to a latest report on the Economic Index, confidence dropped 27% between May 2024 and May 2025.
That's the sharpest year-over-year decline since the end of 2020. People are more stressed about money, less sure they'll keep their jobs and much less likely to make big purchases.
'This 27% decrease in consumer sentiment over the past year is a worrying sign that our economic recovery may be stalling,' said Chip Lupo, a analyst on the report. 'People who have low financial confidence are likely to spend less money, make fewer large purchases, and pay down less debt than people with high confidence. As a result, when consumer sentiment experiences a significant decrease, that is negative for the economy.'
Here's are nine takeaways from the report.
The report indicates that people are holding on to their money. The chances someone will buy a car in the next six months dropped by more than 32%, according to the report.
Buying a home? That's down nearly 30%. Even making any large purchases is down by almost 22%. That affects industries from real estate and auto sales to tourism and retail.
Stress about money increased in the last year, the only index category to go up, said the report. It's a small rise, just under 2 %; but it still matters.
The more people worry about money, the less likely they are to take risks or make purchases, said the report. For businesses that rely on visitors, like those in Hawaiʻi, that can mean less traffic and lower sales.
Confidence in job security took a 16% hit this year, according to the report. That's the steepest drop since the pandemic-era uncertainty of 2020.When people feel less secure in their work, they tend to spend less and save more. That slows down the economy even further, said the report.
How will finances look six months from now? The report found that people are far less hopeful. That optimism dropped almost 14% since last May. It's the biggest drop in future financial outlooks in nearly five years.
Even though optimism ticked up slightly from April to May, it's still nearly 10% lower than last year, the report said. Don't let short-term changes cloud your judgment. The long-term trend is clear. Financial confidence is shrinking, and people are becoming more cautious.
Only about 2.7 out of 5 consumers feel employment opportunities are 'abundant', the report revealed That number is nearly 10% lower than it was in May 2024.
This affects how people feel about relocating for work, investing in new skills or education or even switching industries, said the report.
Debt reduction confidence fell by more than 3%. That might not sound like much; but in an economy where credit cards, student loans and mortgages are already weighing heavily, it's not a good sign.
Confidence in credit scores fell 10%, according to the report. That may reflect how hard it is to pay bills, keep up with interest, or qualify for better rates. Without strong credit, access to new housing, cars or loans becomes even more limited.
This isn't just about what people are buying at home. In places like Hawaiʻi, where tourism drives the economy, this kind of nationwide shift hits hard, said the report. If visitors feel insecure about jobs, finances or debt, they're less likely to book big trips or spend freely once they arrive.
You can click here to read the full report.
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Economic trends are more than numbers. They're about people, what they hope for, what they fear and how they make decisions. As consumer confidence dips, every choice counts. Whether you're spending, saving, or traveling, the best decisions start with awareness.
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