Consumer confidence continued its downward trend in March, with the Conference Board’s Expectations Index hitting its lowest level in 12 years. The index, which measures consumers’ outlook on personal income, business, and labor market conditions, dropped by 9.6 points to 65.2, signaling potential recession fears.
The Consumer Confidence Index also fell by 7.2 points to 92.9, marking the lowest level since January 2021. Economists had expected a reading of 94, according to a poll by LSEG. This marks the fourth consecutive month of declining consumer confidence.
Stephanie Guichard, senior economist at The Conference Board, said, “Consumer confidence declined for a fourth consecutive month in March, falling below the relatively narrow range that had prevailed since 2022.” The report showed that only consumers’ views on current labor market conditions showed slight improvement.
Expectations about future business conditions and employment prospects were especially bleak, hitting a 12-year low. Consumer optimism about future income has significantly decreased, indicating rising concerns about the economy and labor market.
Older consumers, particularly those over 55, contributed most to the decline in confidence. Confidence also dipped among those aged 35 to 55. However, younger consumers under 35 showed increased confidence, driven by more positive views on their present situation.
The report highlighted a rise in inflation expectations, with consumers predicting a 6.2% inflation rate for the next 12 months, up from 5.8% in February. High prices for essentials, like eggs, and concerns over tariffs were key concerns.
Despite the drop in confidence, plans for major purchases like homes and cars have decreased, while plans for electronics and appliances increased, likely due to anticipated price hikes from tariffs.
The decline in consumer confidence comes amid rising inflation concerns and economic uncertainty, potentially signaling tougher times ahead.
