Consumer confidence about the short-term future fell to a 12-year low in March and is well below the threshold that usually signals a recession may be coming, according to a survey conducted by The Conference Board.
The survey, which reflects prevailing business conditions and likely developments for the months ahead, found that the short-term outlook for income, business and labor market conditions fell 9.6 points in March to 65.2. That is the lowest level in 12 years and well below the threshold of 80, which generally signals a recession is ahead.
The data, which was collected up to March 19, also found that consumers’ assessments of current business and labor market conditions were less gloomy, falling 3.6 points to 134.5.
Consumers planning to buy homes and cars in the next six months declined. On a surprise note, those expecting to buy big-ticket items, such as appliances and electronics, ticked up, possibly reflecting plans to buy before impending tariffs lead to price hikes.
Stephanie Guichard, senior economist, global indicators for The Conference Board, said in a statement that consumers’ views of current business conditions weakened to close to neutral and their future expectations were especially gloomy. She described that consumer pessimism about future business conditions was deepening and confidence about future employment prospects had fallen to a 12-year low.
Optimism about future income, a category which had held up strongly in the past few surveys, largely vanished in the March survey, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.
“Consumer confidence declined for a fourth consecutive month in March, falling below the relatively narrow range that had prevailed since 2022,” Guichard said in a statement. “Of the index’s five components, only consumers’ assessment of present labor market conditions improved, albeit slightly.”
The survey showed that March’s decline in confidence was driven by consumers over 55 years old. To a lesser extent, those between 35 and 55 years old also shared negative attitudes toward the future.
However, confidence rose slightly for consumers under 35. Their positive outlook on the present economic situation more than offset those under 35 with gloomier expectations. The decline was also broad-based across income groups, with the only exception being households earning more than $125,000 per year.
The portion of consumers expecting higher interest rates during the next 12 months increased to 54.6% from 52.6% in February, while the share of consumers expecting lower interest rates fell to 22.4% from 24.1%.
Write-in responses about what is impacting the economy were dominated by comments on the Trump administration and its policies, both positive and negative. Write-in responses also showed that inflation remains a major concern for consumers and worries about the impact of trade policies and tariffs are on the rise.
