US consumer confidence tumbles again to lowest since early 2021
A measure of expectations for the next six months dropped nearly 10 points to 65.2, the lowest in 12 years
[WASHINGTON] US consumer confidence fell in March to the lowest in four years on concerns about higher prices and the economic outlook amid the Trump administration’s escalating tariffs.
The Conference Board’s gauge of confidence decreased 7.2 points to 92.9, data released on Tuesday (Mar 25) showed. The median estimate in a Bloomberg survey of economists called for a reading of 94.
A measure of expectations for the next six months dropped nearly 10 points to 65.2, the lowest in 12 years, while a gauge of present conditions declined more modestly.
Consumer sentiment surveys from The Conference Board and University of Michigan have been dismal of late as households fear a resurgence in inflation from President Donald Trump’s tariffs. Companies have warned of higher prices and less demand, coinciding with economists’ forecasts that suggest a risk of stagflation and rising odds of recession.
Inflation expectations over the coming year increased to the highest level in two years. A similar metric from the Michigan survey climbed in early March to the highest since 2022.
While the sentiment readings, and other “soft data” like surveys of businesses and homebuilders have been decidedly downbeat in recent weeks, “hard data” in government statistics suggest the economy is on solid footing. Unemployment remains low and manufacturing activity picked up in February, while another report showed inflation eased last month.
“Consumers’ optimism about future income – which had held up quite strongly in the past few months – largely vanished, suggesting worries about the economy and labour market have started to spread into consumers’ assessments of their personal situations,” Stephanie Guichard, senior economist at the Conference Board, said in a statement.
The big question for economists and Federal Reserve policymakers now is if the weak sentiment trend translates into observable behaviour, like a marked pullback in spending. Consumers are also contending with persistent inflation, high borrowing costs and a softer job market, which are all weighing on household finances. BLOOMBERG
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