Economic Anxiety Grows as Inflation Expectations Rise and Businesses Scale Back Hiring

WASHINGTON (CNN News Source) — New data shows growing concern among American consumers and businesses about the economic road ahead. According to the Conference Board, consumer confidence has fallen to its lowest point since January 2021 — a time marked by a COVID surge and political uncertainty.

The latest index reflects worries about rising inflation, slowed hiring, and possible economic contraction. A separate survey by Duke University and the Federal Reserve Banks of Richmond and Atlanta found that one in four U.S. businesses is scaling back hiring, citing economic turmoil tied to President Trump’s ongoing tariff wars.

Economic experts say stagflation — the combination of high inflation and high unemployment — is now a very real risk.

“High inflation and high unemployment go hand in hand during stagflation,” explains David Halliday, Associate Professor at the George Washington University School of Business.

Halliday notes the challenge this scenario poses for the Federal Reserve. Lowering interest rates to stimulate the economy could worsen inflation, while raising them could stall any economic recovery.

“If they raise interest rates,” Halliday says, “they risk putting the brakes on the economy, making sure that the economy is very slow to recover.”

With businesses cutting back on production and investment, recession concerns are gaining traction — signaling a potential prolonged period of economic decline and job losses.

“Businesses aren't producing as much, they're not investing, so they're not buying from each other,” Halliday adds. “And most concerning, as always, is the increase in unemployment.”

In the face of these challenges, financial experts urge households to take practical steps now — including building up emergency savings and delaying major purchases when possible. They also recommend preparing in advance for worst-case financial scenarios, such as long-term unemployment.

As inflation and uncertainty persist, having a clear financial plan could be key to weathering what may lie ahead.

This report includes content provided by CNN News Source.