Consumer confidence continued to decline in March, with a new report showing one measurement of consumers’ short-term expectations dipping to the lowest level in 12 years.
The Conference Board’s Expectations Index, which measures consumers’ short-term outlook for personal income as well as business and labor market conditions, fell by 9.6 points to 65.2 – the lowest level in a dozen years and well below the threshold of 80 that usually signals a recession is coming.
The Consumer Confidence Index declined in March by 7.2 points to 92.9, falling below the 94 that economists polled by LSEG estimated. That’s the lowest reading for the index since January 2021.
“Consumer confidence declined for a fourth consecutive month in March, falling below the relatively narrow range that had prevailed since 2022,” said Stephanie Guichard, senior economist, global indicators at The Conference Board.
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“Of the Index’s five components, only consumers’ assessment of present labor market conditions improved, albeit slightly,” Guichard said. “Views of current business conditions weakened to close to neutral. Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low.”
“Meanwhile, consumers’ optimism about future income – which had held up quite strongly in the past few months – largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations,” she added.
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The Conference Board’s report noted that the decline in confidence was driven mainly by consumers over 55 years old, and to a lesser extent by those between 35 and 55. Confidence increased among consumers under 35 as improving assessments of their present situation more than offset more pessimistic expectations.
The decline in confidence was broadly seen across income groups, with the lone exception being households earning over $125,000 a year.
Consumers’ average 12-month inflation expectations increased again from 5.8% in February to 6.2% in March, with the Conference Board noting that “consumers remained concerned about high prices for key household staples like eggs and the impact of tariffs.”
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Plans for significant purchases like homes and cars declined on a six-month moving average basis, though plans to buy other big-ticket items like appliances and electronics increased – potentially due to consumers looking to buy before tariffs prompt price increases.
The Conference Board noted that respondents to its survey who offered write-in responses were weighing in on the Trump administration’s policies and expressed concerns about inflation and the impact of a trade war on prices.
“Comments on the current administration and its policies, both positive and negative, dominated consumers’ write-in responses on what is affecting their views of the economy. Write-in responses also showed that inflation is still a major concern for consumers and that worries about the impact of trade policies and tariffs in particular are on the rise. There were also more references than usual to economic and policy uncertainty.”
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