In March 2025, the Conference Board reported a significant decline in the U.S. Consumer Confidence Index, which fell to 92.9, marking its lowest point since January 2021. This represents the fourth consecutive monthly decrease, signaling growing concerns among consumers about the nation’s economic future.
The Expectations Index, which assesses consumers’ short-term outlook on income, business, and labor market conditions, dropped to 65.2, reaching a 12-year low. This sharp decline suggests heightened pessimism regarding future economic conditions.
Several factors contribute to this downturn in consumer confidence:
Inflation Concerns: Rising prices have eroded purchasing power, leading to increased consumer apprehension.
Tariff Policies: Ongoing trade disputes and the implementation of tariffs have introduced economic uncertainties, affecting consumer sentiment.
Labor Market Outlook: Despite a relatively strong labor market, there are growing fears about future employment stability.
The decline in consumer confidence spans various demographic groups but is particularly pronounced among older and higher-income individuals. Given that consumer spending accounts for approximately 70% of the U.S. economy, a sustained decrease in confidence could have significant implications for economic growth.
Policymakers and business leaders should closely monitor these trends and consider measures to address the underlying issues contributing to consumer pessimism. Restoring consumer confidence is crucial for maintaining economic stability and fostering growth.