Consensus is growing that consumers are worried

The Conference Board’s Consumer Confidence Index dropped sharply in March, confirming a showing by the University of Michigan Consumer Sentiment Survey the previous week. The Consumer Confidence Index dropped by 7.2 points to 92.9, a substantial decline that signals growing unease among Americans.

The University of Michigan survey fell by a staggering 12% since February, closely mirroring The Conference Board’s findings.

The most concerning aspect of the March Conference Board report is the dramatic fall in the Expectations Index, which measures consumers' short-term outlook for income, business, and labor market conditions. This index plunged 9.6 points to 65.2, the lowest level in 12 years and well below the crucial 80-point threshold that often precedes a recession.

"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 at The Conference Board, in a statement.

"Consumers' expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low."

While consumers' assessment of the current labor market showed a slight improvement, their views on current business conditions weakened. Notably, optimism about future income, which had been relatively strong in recent months, has largely evaporated.

Consumers approaching retirement are least confident

The decline in confidence was particularly pronounced among consumers over 55 and those aged 35-55. Interestingly, confidence slightly increased among consumers under 35, driven by a more positive view of the present situation. The drop was also widespread across income groups, except for households earning over $125,000 annually.

Adding to the economic unease, consumers’ expectations for the stock market turned negative for the first time since late 2023, with a significant increase in those anticipating a decline in stock prices. Average 12-month inflation expectations also rose, reaching 6.2%, as consumers remain concerned about rising prices for essential goods and the impact of tariffs.

Purchasing plans for homes and cars declined, although intentions to buy big-ticket items like appliances and electronics ticked up, possibly due to concerns about impending tariff-related price increases.