Consumers are feeling very nervous. The Expectation Index from The Conference Board based on consumers’ short-term outlook for income, business, and labor market conditions—dropped 9.6 points to 65.2, the lowest level in 12 years and well below the threshold of 80 that usually signals a recession ahead.
The cutoff date for preliminary results was March 19, 2025.
And the organizations' Consumer Confidence Index fell by 7.2 points in March to 92.9 (1985=100). While Present Situation Index—based on consumers’ assessment of current business and labor market conditions—decreased 3.6 points to 134.5.
“Consumer confidence declined for a fourth consecutive month in March, falling below the relatively narrow range that had prevailed since 2022,” said Stephanie Guichard, senior economist, Global Indicators at The Conference Board, in a statement.
“Of the Index’s five components, only consumers’ assessment of present labor market conditions improved, albeit slightly. Views of current business conditions weakened to close to neutral. Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low. Meanwhile, 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.”
March’s fall in confidence was driven by consumers over 55 years old and, to a lesser extent, those between 35 and 55 years old. By contrast, confidence rose slightly among consumers under 35, as an uptick in their assessments of the present situation more than offset gloomier expectations. The decline was also broad-based across income groups, with the only exception being households earning more than $125,000 a year.
Guichard added: “Likely in response to recent market volatility, consumers turned negative about the stock market for the first time since the end of 2023. In March, only 37.4% expected stock prices to rise over the year ahead—down nearly 10 percentage points from February and 20 percentage points from the high reached in November 2024. On the flip side, 44.5% expected stock prices to decline (up 11 ppts from February and over 22 ppts more than November 2024). Meanwhile, average 12-month inflation expectations rose again—from 5.8% in February to 6.2% in March—as consumers remained concerned about high prices for key household staples like eggs and the impact of tariffs.”
A special question about how easy it is for consumers to form expectations about the future found considerable self-confidence among consumers in assessing their own future income prospects and family financial situation, with over 45% finding it easy and only about 20% finding it difficult. However, forming expectations about broader economic trends appeared more challenging: over one-third found it difficult to assess future employment and business conditions while 38.8% found it difficult to predict inflation.
On a six-month moving average basis, purchasing plans for both homes and cars declined. Surprisingly, given the anxiety about the future, intentions to buy big-ticket items—including appliances and electronics—ticked up, which may reflect plans to buy before impending tariffs lead to price increases. Consumers’ overall intentions to purchase additional services in the months ahead were little changed, but their priorities shifted. Fewer consumers planned to spend more on movies and live entertainment or sports, and more planned to spend on outdoor activities and travel. Vacation plans also increased.
Comments on the current Administration and its policies, both positive and negative, dominated consumers’ write-in responses on what is affecting their views of the economy. Write-in responses also showed that inflation is still a major concern for consumers and that worries about the impact of trade policies and tariffs in particular are on the rise. There were also more references than usual to economic and policy uncertainty.
Present Situation
Consumers’ assessments of current business conditions were significantly less positive in March.
- 17.7% of consumers said business conditions were “good,” down from 19.1% in February.
- 16.6% said business conditions were “bad,” up from 14.8%.
Consumers’ views of the labor market improved slightly in March.
- 33.6% of consumers said jobs were “plentiful,” unchanged from February.
- 15.7% of consumers said jobs were “hard to get,” down from 16.0%.
Expectations Six Months Hence
Consumers’ outlook for business conditions worsened in March.
- 17.1% of consumers expected business conditions to improve, down from 20.8% in February.
- 27.3% expected business conditions to worsen, up from 25.5%.
Consumers’ outlook for the labor market outlook also deteriorated.
- 16.7% of consumers expected more jobs to be available, down from 18.8% in February.
- 28.5% anticipated fewer jobs, up from 26.6% in February
Consumers were more pessimistic about their income prospects in March.
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- 16.3% of consumers expected their incomes to increase, down from 18.8% in February.
- 15.5% expected their income to decrease, up from 12.8%.
