US consumer confidence falls sharply amid Donald Trump spending cuts frenzy
Donald Trump’s ‘big, beautiful’ $1.5 trillion spending cuts bill is set to face opposition in Congress, as US consumer confidence dropped to its lowest in years.
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US consumer confidence in February saw its largest monthly decline since August 2021, deepening a recent slump in optimism in President Donald Trump’s second month back in office.
American buyers also sharply increased their expectations that inflation would reignite, citing concerns about the impact of Mr Trump’s trade and immigration policy proposals on prices.
The US consumer confidence index fell 7.0 points to 98.3 in February from a revised 105.3 in January, the Conference Board announced in a statement.
“Consumers’ confidence has deteriorated sharply in the face of threats to impose large tariffs and to slash federal spending and employment,” Pantheon Macroeconomics chief US economist Samuel Tombs wrote in a note to clients.
February’s figures marked the largest monthly decline since August 2021, according to the Conference Board, and returned consumer confidence to its lowest level since June 2024.
The February data was sharply below market expectations of 103.1, according to Briefing.com.
“This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022,” Conference Board senior economist Stephanie Guichard said in a statement.
Ms Guichard noted that average 12-month inflation expectations “surged” to 6 per cent in February from 5.2 per cent a month earlier.
She added that there was a “sharp increase” in the mention of tariffs and trade by survey respondents.
“Most notably, comments on the current Administration and its policies dominated the responses,” she said.
It comes as the latest Reuters/Ipsos poll showed Americans have given President Trump middling marks on his handling of the economy and efforts to shrink the US government, and are unimpressed by the tariffs skirmishes with other nations, which they see as inflationary and unimportant.
Meanwhile, Mr Trump clapped back on Truth Social, posting memes saying “New poll shows massive support for President Trump and his agenda” - in capital letters - and citing his own government departments as sources.
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US TREASURER DEFENDS TRUMP TARIFFS AFTER MEETING WITH CHALMERS
US Treasury Secretary Scott Bessent has defended President Donald Trump’s use of tariffs shortly after he met with Australian Treasurer Jim Chalmers, who is hoping for an exemption from Mr Trump’s steep levies on steel and aluminum imports.
Since taking office in January, Mr Trump has unveiled tariff plans threatening to hit allies and adversaries alike, including 25 percent levies on steel and aluminum imports to take place next month.
In a wide-ranging speech at the Australian Embassy, Mr Bessent said tariffs are an essential component of Mr Trump’s broader economic strategy.
They can be “an important source of government revenue, which can help fund investments,” he added.
Tariffs can also be “used as a tool to correct and manage the internal imbalances in other economies” by adjusting how much American consumers take in of their excess supply, Mr Bessent said.
On China, Mr Bessent said, “We have to push back and tell them that they cannot export their deflation to the rest of the world,” he said.
“China really needs more consumption” and fewer exports, he added.
Domestically, Mr Bessent said the Trump administration’s goal is to “reprivatise the economy,” and reiterated a need to end “government waste”.
The Treasury Department will “streamline best practice regulations,” working towards a level playing field, Mr Bessent said.
WHITE HOUSE MULLS EXPELLING CANADA FROM INTELLIGENCE NETWORK
A shock suggestion by one of Donald Trump’s key advisers to expel Canada from the Five Eyes alliance has been shot down by Australia, another member of the intelligence network.
The President’s trade adviser Peter Navarro has proposed removing Canada from the Five Eyes group, according to the Financial Times, as Mr Trump threatens America’s northern neighbour with tariffs and maintains he wants to turn Canada into the 51st US state.
Speaking in Washington DC, Australian Treasurer Jim Chalmers said Canada was an important partner in the intelligence network.
“Without knowing the source of that speculation, I would just point out that the Five Eyes community is a very, very important community for Australia and we would like to see its membership remain intact,” he said.
Mr Navarro did not respond when asked by the Financial Times about his radical idea. After the report was published, he denied putting forward the proposal, saying it was “crazy stuff”.
“We would never, ever jeopardise our national security … with allies like Canada,” he said.
Outgoing Canadian Prime Minister Justin Trudeau recently said Mr Trump’s ambition to annex Canada was a “real thing”.
TRUMP AGENDA FACES REALITY CHECK
US President Donald Trump’s radical agenda on everything from immigration to tax reform faces a key reality test in Congress on Tuesday, where Republicans have only an ultra-thin majority and are struggling to agree on a budget.
Members of the lower house will vote on a resolution that would set the blueprint for the 2025 federal government budget, with US$4.5 trillion for tax cuts and more than US$1.5 trillion in spending cuts on the docket.
Republican Speaker Mike Johnson, a key Trump ally, has been working to corral his party’s politicians to back the bill, which Democrats say will result in deep cuts to the Medicaid program that many lower-income US families rely on.
A number of Republicans suggest the proposed cuts do not go deep enough, while others are focused on stopping the ever-growing US national debt, and some worry about possible impacts on Medicaid and welfare programs.
Mr Trump’s party has only a one-seat majority in the House, and the bill would require either every Republican member to vote for it, or for some Democrat members to flip.
Looming over Tuesday’s debate is the March 14 deadline for Congress to agree a budget proposal outline or face yet another US government shutdown.
One of the Democratic demands is an assurance that funding approved by Congress is actually spent, rather than being put on the chopping block by Elon Musk’s Department of Government Efficiency, which is seeking to slash through the entire US budget.
JD VANCE SHRUGS OFF TRUMP SNUB
US Vice President JD Vance said it’s too early for President Donald Trump to name him as his successor after Mr Trump declined to endorse his second in command as the Republican nominee in 2028.
VP Vance, in an interview with The Daily Mail, laughed off questions over why his boss wouldn’t pick him as his successor.
“I think he said exactly what he should have said, which is: ‘It’s too early’,” Mr Vance said. “There will be a time to focus on politics, of course [like] the midterms… so let’s do a good job and then worry about the midterms,” Mr Vance continued. “And then we’ll worry about presidential politics at the appropriate time.”
NEW PITCH FOR MILITARY, CITIZEN RUN MIGRANT DETENTION CAMPS
The Trump administration has received a US$25 billion pitch from prominent defence contractors to set up military style “processing camps” to help carry out mass migrant deportations, as well as enlisting citizens to help carry out the raids, a new report says.
The aggressive blueprint, spearheaded by former Blackwater chiefs Erik Prince and Bill Mathews, aims to use a range of tactics to kick out 12 million illegal migrants from the US before the 2026 midterms, Politico reported.
The 26-page document has been circulating among allies of President Trump since December.
It wasn’t immediately clear if President Trump had yet viewed the pitch, the New York Post reports.
“While White House officials receive numerous unsolicited proposals from various private-sector players, it is ultimately up to the agencies responsible for carrying out the President’s agenda to consider and sign contracts to advance their mission,” a White House spokesman said.
In addition to the camps on military bases, the pitch also lays out the need for a fleet of 100 private planes and a “small army” of private citizens to help carry out arrests.
“To keep pace with the Trump deportations, it would require a 600% increase in activity,” the plan states.
“It is unlikely that the government could swell its internal ranks to keep pace with this demand … in order to process this enormous number of deportations, the government should enlist outside assistance.”
It comes as CNN reported the Trump administration is halting its plan to house up to 30,000 undocumented migrants in tents at the military base in Guantanamo Bay, Cuba.
A US official said the tents don’t meet detention standards because they lack airconditioning or electricity.
Last week, more than 170 migrants at the naval base were flown to Venezuela, nearly leaving Guantanamo empty.
Since then, 17 migrants have been brought to the detention facility portion of the base, while roughly 1,000 US service members are on site supporting the mission.
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