By Americans are growing increasingly pessimistic about the US economy as uncertainty surrounding President Donald Trump’s policies and rising prices weigh on consumer sentiment.
The latest consumer confidence data paints a bleak picture, with expectations for future economic conditions plunging to their lowest level in over a decade.
This downturn in sentiment raises concerns that declining confidence could translate into weaker consumer spending, a critical driver of economic growth.
According to the Conference Board, the consumer confidence index fell to 92.9 in March, down from 100.1 in February, marking its lowest reading in more than four years.
Oof! Conference Board’s consumer confidence reading fell sharply with expectations the lowest since 2013.
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A particularly concerning drop was seen in the expectations index, which measures consumers’ short-term outlook on income, business conditions, and the labor market.
This metric declined to 65.2 from 72.9, staying below the 80-point recession warning threshold for the second consecutive month.
The expectations index also hit a 12-year low, reflecting growing concerns about personal finances.
Consumers’ outlook on their financial situation fell to its weakest level in more than two years, adding to fears that economic caution could lead to reduced discretionary spending.
US consumer confidence fell in March to the lowest level in four years on concerns about higher prices and the economic outlook amid the Trump administration’s escalating tariffs.
Michael McKee reports trib.al/WWU6hEQ
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The weakening confidence trend is not new
Over the past several months, surveys have consistently indicated declining optimism about the economy.
The concern among market analysts is that sustained pessimism could prompt Americans to scale back spending, potentially dampening economic momentum.
However, Federal Reserve Chair Jerome Powell has urged caution when interpreting these surveys.
During a March 19 press conference, Powell noted that soft data, such as consumer sentiment surveys, do not always align with real economic activity.
“The relationship between survey data and actual economic activity hasn’t been very tight,” Powell said.
There have been plenty of times where people are saying very downbeat things about the economy and then going out and buying a new car. But we don’t know that that will be the case here. We will be watching very carefully for signs of weakness in the real data.
For now, most economists believe that while growth may be slowing, the US economy is not on the brink of a major downturn.
Many argue that despite soft data readings, real economic indicators, such as employment and retail sales, remain resilient.
Morgan Stanley’s chief global economist echoed this sentiment in a note to clients on Sunday, stating that concerns over a recession are likely overblown.
He pointed to January’s unexpected drop in retail sales, which initially alarmed investors, only for February’s data to show a strong rebound.
While the U.S. economy faces headwinds from inflation, trade policies, and global uncertainty, the data so far does not indicate an imminent recession.
However, economists and policymakers will be closely monitoring whether declining consumer confidence translates into a meaningful pullback in spending, which could have broader implications for economic growth in the months ahead.
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