Consumer confidence in the US took a sharp downturn in March, reaching its lowest level since November 2022 as concerns over inflation continued to rise.
The University of Michigan’s Index of Consumer Sentiment dropped 11% this month to 57.9, marking the third consecutive decline and a 22% fall since December 2024.
The decline was broad-based, affecting all demographics, regardless of age, education, income, wealth, political stance or location, said Joanne Hsu, director of the Surveys of Consumers.
While views on current economic conditions remained steady, expectations for the next six months plunged.
The Index of Consumer Expectations slid 15.3% from 64.0 in February to 54.2 in March.
“Expectations for the future deteriorated across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions and stock markets,” Hsu said.
“Many consumers cited the high level of uncertainty around policy and other economic factors. Frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences.”
Additionally, consumers across all political affiliations reported a worsening outlook.
“Despite their greater confidence following the election, Republicans posted a sizable 10% decline in their expectations index in March,” Hsu added.
“For Independents and Democrats, the expectations index declined an even steeper 12 and 24%, respectively.”
Inflation expectations also surged, with year-ahead projections climbing to 4.9% in March from 4.3% in February – the highest level since November 2022.
Long-term expectations jumped to 3.9% from 3.5%, the biggest month-over-month increase since 1993.
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