Consumer⁣ Confidence⁢ Plummets Amid Rising Inflation Expectations

‍ Updated May 29, 2025

The Conference Board reported a significant ⁢drop in the Consumer Confidence Index, a key indicator of economic outlook and consumer spending, which fell to 92.9 in March. This figure is down from 100.1 the previous month and below the anticipated 94.0, signaling growing concerns about the economy.

A deeper analysis reveals that the expectations measure for the next six months has plunged nearly 10 points to 65.2. ⁣This‍ is the lowest level in 12 ⁣years ⁤and well below the 80 mark, which⁣ often signals an impending recession. The assessment of current conditions experienced a more moderate decline.

Stephanie Guichard, senior economist at The Conference Board, noted that this decline marks the fourth consecutive month of decreases, “falling below the relatively narrow range that had prevailed since 2022.”

Guichard added,⁣ “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.”

Regarding the job market, approximately 33.6% of consumers reported that jobs were “plentiful,” consistent with the previous month. Meanwhile, 15.7% noted jobs were “hard to get,” a slight decrease from 16.0%. The Present Situation‍ Index edged down to 134.5 from 136.5 in February.

Consumers are also expressing⁤ increased pessimism about ⁤the stock market, possibly reacting to ⁣recent market volatility. This marks the first time since late 2023 that consumers have shown such negative sentiment.

In ‍March, only 37.4% of consumers anticipated a rise in stock prices over the next year,a drop of nearly 10 percentage points from February and 20 percentage points from the peak in November 2024. conversely, 44.5% foresaw a decline in stock prices, an increase of 11 percentage points from⁢ February⁣ and more than 22 percentage points higher ⁣than in November ⁤2024.

Average 12-month inflation expectations also climbed to 6.2% in March from 5.8% in February. This increase is driven by persistent consumer worries over ‍elevated prices for essential household items and⁤ the effects of tariffs, even though ⁤this uptick was milder than the swings seen in the University ⁢of Michigan’s data.

What’s next

Economists will closely monitor upcoming economic data to assess whether this decline in consumer confidence and⁣ rising inflation expectations will translate ⁣into a slowdown in consumer spending ‍and broader economic ⁤activity.