WASHINGTON (AP) — U.S. consumer confidence fell for the fourth straight month as Americans’ anxiety about their financial futures declined to a 12-year low amid rising concern over tariffs and inflation.
The Conference Board reported Tuesday that its consumer confidence index fell 7.2 points in March to 92.9. Analysts were expecting a decline to a reading of 94.5, according to a survey by FactSet.
The Conference Board’s report Tuesday said that the measure of Americans’ short-term expectations for income, business and the job market fell 9.6 points to 65.2.
It is the lowest reading in 12 years and well below the threshold of 80, which the Conference Board says can signal a potential recession in the near future. However, the proportion of consumers anticipating a recession in the next year held steady at a nine-month high, the board reported.
“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 at The Conference Board.
The administration of President Donald Trump has largely played down the decline in consumers’ outlook, saying it doesn’t necessarily reflect what’s happening in the actual economy. This argument is similar to what officials in former President Biden’s administration said as high inflation suppressed consumer confidence without undermining growth.
“I just don’t think that there’s been a very strong correlation between the confidence data and actual consumer spending in recent years,” Stepehn Miran, the chairman of the Council of Economic Advisers, told CNBC on Tuesday. “You go out in the street, people are going about their lives, you know, they’re getting their paychecks, they’re spending their paychecks, the economy is marching on ahead.”
The prospect of Trump’s tariffs hampering growth while increasing inflationary pressures has distressed both consumers and businesses.
Walmart turned in another strong year as inflation-weary shoppers flocked to their outlets for deals, but the nation’s largest retailer slashed its profit forecast for this year. Its sales outlook was also mild, potentially a reflection of challenges ahead as consumers pull back on spending and tariffs on China and other countries threaten Walmart’s low-price model.
Target’s sales and profit slipped during the crucial holiday quarter, and the company predicted that there would be “meaningful pressure” on its profits to start the year in part because of tariffs on Mexico, Canada and China.
