Consumer Confidence Falls To Lowest Since 2022 As Inflation, Tariff Worries Grow

A wave of pessimism is sweeping across American households, as new data shows consumer confidence has plunged to its lowest level in over a year, with fears of inflation, stock market volatility and tariff-driven price hikes eroding optimism about the future.

The Consumer Confidence Index fell by 7.2 points to 92.9, its fourth consecutive monthly decline and the lowest reading since late 2022, according to data released Tuesday by The Conference Board.

The Expectations Index—a measure of how consumers see business, income and labor market conditions six months ahead—dropped to 65.2, well below the 80 threshold that typically signals a recession ahead.

The gauge represents the lowest reading since 2013. "Consumers' expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low," said Stephanie Guichard, senior economist at The Conference Board.

The Present Situation Index, which gauges views on current economic conditions, also declined, falling from 138.1 to 134.5.

While views on the labor market were stable—with 33.6% saying jobs were "plentiful" and only 15.7% saying jobs were "hard to get"—fewer consumers saw business conditions as positive. Only 17.7% said conditions were "good," compared with 19.1% in February.

Older Americans And High-Income Households Diverge

The decline in sentiment was broad-based across age and income groups, but it was most pronounced among Americans over 55. Confidence also slipped for those aged 35 to 54.

Interestingly, consumers under 35 reported a small boost in confidence, driven by improved views of the current economic situation.

On the income front, sentiment deteriorated across nearly all income levels except for households earning above $125,000 annually.

Tariffs, Eggs, Inflation: Consumers Feel The Squeeze

One of the most striking shifts came in inflation expectations.

“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," the report stated.

Write-in survey responses cited inflation and trade policy among the top concerns.

The economic commentary from participants highlighted a growing fear that protectionist policies could further raise prices on goods ranging from electronics to appliances, leading some to consider buying now before prices surge.

"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," said Guichard.

Guichard said optimism about future income "largely vanished," adding that "worries about the economy and labor market have started to spread into consumers' assessments of their personal situations."

Market Sentiment Turns Negative

Consumers' view of the stock market also deteriorated noticeably. Only 37.4% expected stock prices to rise over the next 12 months, down nearly 10 percentage points from February and 20 points from November 2024.

Meanwhile, the share expecting a market decline surged to 44.5%, up 11 percentage points month-over-month.

This negative shift in market expectations coincided with continued volatility in equities during March, as investors grappled with sticky inflation data, mixed earnings, and rising geopolitical risk.

Earlier this month, the S&P 500 index—as tracked by the SPDR S&P 500 ETF Trust SPY—entered correction territory after dropping more than 10% from its February peak.

Personal Finance Confidence Weakens

Consumers' outlook for their own income turned darker. Only 16.3% said they expected their incomes to rise over the next six months, down from 18.8% in February. Meanwhile, 15.5% expected their income to fall, a notable increase from 12.8%.

That pessimism was also reflected in the broader economic outlook. Just 17.1% expected business conditions to improve, while 27.3% expected them to worsen. Similarly, the percentage of people expecting more job opportunities dropped to 16.7%, while 28.5% anticipated a decrease in available jobs.

One potential explanation: Rising interest rate expectations. The share of consumers anticipating higher interest rates over the next year rose to 54.6%, up from 52.6% last month, while only 22.4% expect rates to decline.

Recession Fears Surge Among Consumers

The perceived probability of a U.S. recession in the next 12 months held steady at 67%, a level not seen since mid-2023.

And while over 45% of consumers reported feeling confident in evaluating their own financial prospects, many struggled to assess broader economic trends.

More than one-third said it was difficult to gauge employment and business conditions, and 38.8% had trouble predicting future inflation.

Consumer assessment over the risk of a recession is well above what speculators currently expect.

Kalshi, a CFTC-regulated betting platform, assigns 38% odds of a U.S. recession by the end of 2025.

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