In a lingering effect from the presidency of Joe Biden, consumer confidence has plummeted to a disturbing 12-year low, as reported by the Conference Board in March 2025.
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With inflation, employment, and economic uncertainty on the rise, the American people’s trust in their financial future is vanishing.
If these issues are left unchecked, the economic growth that the country desperately needs may come to a halt.
March saw the consumer confidence index drop to 92.9, the fourth consecutive month of decline.
More alarmingly, the expectations index tumbled to 65.2, well below the recession threshold of 80, pointing to deteriorating public perceptions about future economic conditions.
Americans’ expectations for the economy have reached their lowest level in over a decade, underscoring a severe crisis of confidence.
Key consumer indicators paint a bleak picture.
The percentage of consumers who anticipate a lower income in the next year has risen to 15.5%.
Meanwhile, inflation expectations also worsened, increasing to 6.2% in March from February’s 5.8%.
These indicators suggest a hesitancy in spending that could have cascading effects on economic growth due to the significant role consumer spending plays in the economy.
“Consumers’ optimism about future income — which had held up quite strongly in the past few months — largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations,” said Stephanie Guichard, senior economist, global indicators at The Conference Board, cited by CNBC.
The data also reveals a broader worry about the job market, with more people expecting fewer jobs and pessimism growing over stock market performance.
Only 37.4% expect higher stock prices in the next year, a significant drop from previous months.
Inflation continues to hover above the Federal Reserve’s 2% target, increasing concerns about consumer spending.
Retail giants like Walmart and Target are already reporting shifts in consumer behavior, with adjusted profit forecasts reflecting the economic uncertainty.
This caution among consumers has affected purchasing plans for large items like homes and cars, though there is an uptick in interest in buying appliances, likely due to looming tariff impacts.
The Trump administration has downplayed the confidence plunge, arguing that the data does not adequately reflect the real economic conditions.
Stephen Miran, Chairman of the White House’s Council of Economic Advisers, attributes the decline to political influences, emphasizing positive economic signs like stable retail sales and low layoffs.
US consumer confidence falls for 4th straight month as economic expectations about the future fall to a 12-year low. https://t.co/SEiazZh06C
— Yahoo News (@YahooNews) March 25, 2025
