U.S. Consumer Confidence Hits 12-Year Low

WASHINGTON—The downward trend in U.S. consumer confidence persisted through 2025, with a notable decline in Americans’ outlook on their financial future reaching a 12-year low, primarily due to heightened concerns over tariffs and inflation.
The Conference Board disclosed on Tuesday a dip of 7.2 points in its consumer confidence index for March, bringing it down to 92.9, marking the fourth consecutive monthly decline and the lowest since January 2021. This figure fell short of the anticipated 94.5 projected by analysts in a FactSet survey.
The organization highlighted a 9.6-point drop in the short-term expectations for income, business, and the job market, reaching a level of 65.2, the lowest in over a decade. This metric fell significantly below the 80-point threshold, signaling a possible upcoming recession. Consumer anticipation of a recession remains at its highest in nine months, as noted by the Conference Board.
“Optimism about future income, previously stable, has largely dissipated, reflecting growing concerns about the economic and labor markets influencing consumers’ personal financial assessments,” commented Stephanie Guichard, senior economist at The Conference Board.
The Trump administration has downplayed the decline in consumer mood, arguing it doesn’t necessarily align with the economic reality. This sentiment echoes previous assertions by the Biden administration, where high inflation’s dampening effect on consumer confidence did not hinder economic growth.
Stephen Miran, chairman of the Council of Economic Advisers, stated, “There seems to be a weak correlation between the confidence data and actual consumer spending. People continue their daily lives, receiving and spending their incomes.”
However, major retailers have observed a noticeable change in consumer spending behavior. For instance, Walmart has benefited as consumers look for bargains amidst rising prices. Despite this, Walmart recently lowered its profit forecast for the year and expressed a conservative sales outlook, excluding potential tariff impacts for 2025.
In contrast, Target reported decreased sales and profits during the holiday season and warned of significant profit pressures at the year’s start due to tariffs with Mexico, Canada, and China.
Other retailers, including Macy’s, Best Buy, Abercrombie & Fitch, and Dollar General, have expressed caution regarding their 2025 projections, largely due to “economic uncertainty.”
While purchasing intentions for homes and cars decreased, consumer intentions to buy big-ticket items, like appliances, saw an unexpected rise. This may suggest a strategy to purchase before anticipated tariff-induced price hikes come into effect.
Inflation, while down from its post-pandemic surge, remains above the Federal Reserve’s 2% target. Elevated prices, alongside announced tariffs, have left Americans cautious about incurring expenses amid economic worries.
Initially, consumers showed increasing confidence during the holiday season, leading to substantial spending. Yet, by January, retail sales saw a significant drop, partly attributed to cold weather. However, there was a slight rebound in February with increased spending, albeit modestly.
On Tuesday, the board also reported a 3.6-point decrease in consumers’ assessment of current economic conditions, bringing it to 134.5.
The consumer confidence index evaluates both current economic conditions and six-month outlooks among Americans. With consumer spending comprising about two-thirds of U.S. economic activity, it remains a critical indicator of the American consumer’s sentiment and behavior.