Amid declining economic and personal financial outlooks for the year’s second half, the Conference Board Consumer Confidence Index fell by 7.2 points in March to 92.9, a figure below the 100 mark that divides positive from negative sentiments.
Consumers more than 55 years of age and, to a lesser extent those between 35 and 55 years old, drove the March decline in confidence. However, confidence rose slightly among consumers under 35, as an uptick in their assessments of the present situation more than offset downbeat expectations. The decline was broad-based across income groups, with the exception being households earning more than $125,000 a year.
Consumer views of current family financial situation improved slightly, but expectations for future finances declined to the lowest level since July 2022. The proportion of consumers anticipating a recession over the next 12 months remained steady in March with 67% of those contacted in a survey considering the chances somewhat or very likely. The share of consumers expecting higher interest rates over the next 12 months advanced to 54.6% from 52.6% in February, while the share of consumers expecting lower interest rates declined further to 22.4% from 24.1%.
On a six-month moving average basis, purchasing intentions for homes and cars declined, yet intentions to buy big-ticket items, such as appliances and electronics ticked up, which may reflect plans to buy before impending tariffs lead to price increases, according to the Conference Board.
“Consumer confidence declined for a fourth consecutive month in March, falling below the relatively narrow range that had prevailed since 2022,” said Stephanie Guichard, Conference Board senior economist, global indicators. “Of the Index’s five components, only consumers’ assessment of present labor market conditions improved, albeit slightly. 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.”
In looking beyond the basic figures, Guichard noted, “Likely in response to recent market volatility, consumers turned negative about the stock market for the first time since the end of 2023. In March, only 37.4% expected stock prices to rise over the year ahead, down nearly 10 percentage points from February and 20 percentage points from the high reached in November 2024. On the flip side, 44.5% expected stock prices to decline, up 11 percentage points from February and over 22 percentage points more than November 2024. Meanwhile, average 12-month inflation expectations rose again from 5.8% in February to 6.2% in March as consumers remained concerned about high prices for key household staples like eggs and the impact of tariffs.”
