US Consumer Confidence Plummets for Fourth Straight Month

The University of Michigan consumer sentiment index for the US plummeted to 57.9 in March 2025, marking the lowest level since November 2022. This decline is the fourth consecutive month of falling consumer confidence, with many consumers citing high levels of uncertainty around policy and other economic factors. The index for current economic conditions remained relatively unchanged at 53.5, but expectations for the future deteriorated significantly to 54.2. This widespread pessimism spans multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets.



Inflation expectations have also surged, with the year-ahead gauge rising to 4.9%, the highest reading since November 2022, from 4.3%. Additionally, inflation expectations for the next five years surged to 3.9% from 3.5% in February, the largest month-over-month increase seen since 1993. This surge in inflation expectations is likely contributing to the overall pessimism among consumers.

The Conference Board Consumer Confidence Index® also fell by 7.2 points in March to 92.9, with the Expectations Index dropping to 65.2, the lowest level in 12 years. This index is based on consumers' short-term outlook for income, business, and labor market conditions, and a reading below 80 often signals a forthcoming recession. The decline 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.

Consumers' views of their Family's Current Financial Situation improved slightly but their expectations for future finances declined to the lowest level since July 2022. The proportion of consumers anticipating a recession over the next 12 months remained steady at a nine-month high. Additionally, 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.

In the coming months, these factors could evolve in several ways. If inflation continues to rise, consumers may become even more pessimistic about their future financial situations. Conversely, if inflation expectations stabilize or decrease, consumer confidence could improve. Additionally, if the labor market remains strong and unemployment rates stay low, consumers may feel more secure about their financial situations and become more optimistic about the future. However, if the labor market weakens or unemployment rates rise, consumer pessimism could deepen.

The current pessimism among consumers is driven by several specific economic indicators and factors. One of the most significant indicators is the University of Michigan consumer sentiment index, which plunged to 57.9 in March 2025, the lowest since November 2022. This decline was attributed to a high level of uncertainty around policy and other economic factors. The index for current economic conditions was little changed at 53.5, but expectations for the future deteriorated to 54.2, indicating a widespread pessimism across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets.

Inflation expectations have also surged, with the year-ahead gauge rising to 4.9%, the highest reading since November 2022, from 4.3%. Additionally, inflation expectations for the next five years surged to 3.9% from 3.5% in February, the largest month-over-month increase seen since 1993. This surge in inflation expectations is likely contributing to the overall pessimism among consumers.

The Conference Board Consumer Confidence Index® also fell by 7.2 points in March to 92.9, with the Expectations Index dropping to 65.2, the lowest level in 12 years. This index is based on consumers' short-term outlook for income, business, and labor market conditions, and a reading below 80 often signals a forthcoming recession. The decline 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.

Consumers' views of their Family's Current Financial Situation improved slightly but their expectations for future finances declined to the lowest level since July 2022. The proportion of consumers anticipating a recession over the next 12 months remained steady at a nine-month high. Additionally, 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.

In the coming months, these factors could evolve in several ways. If inflation continues to rise, consumers may become even more pessimistic about their future financial situations. Conversely, if inflation expectations stabilize or decrease, consumer confidence could improve. Additionally, if the labor market remains strong and unemployment rates stay low, consumers may feel more secure about their financial situations and become more optimistic about the future. However, if the labor market weakens or unemployment rates rise, consumer pessimism could deepen.