Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future,” said Dana M. Peterson, Chief Economist at The Conference Board.
The Conference Board Consumer Confidence Index® was 104.7 (1985=100) in March, essentially unchanged to slightly down from a downwardly revised 104.8 in February. Read more about why Confidence Scores matter.
Key Takeaways
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to 151.0 (1985=100) in March from 147.6 in February. Meanwhile, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 73.8 (1985=100), down from 76.3 last month. (An Expectations Index reading below 80 often signals a forthcoming recession.)
Consumers remained concerned with elevated price levels. Although fears of recession continued to trend downward, consumers expressed more concern about the US political environment compared to prior months. (Note: The Consumer Sentiment Survey also picked up a similar trend in March with many of their survey respondents stating their views on the economy were contingent on November's general election
Assessments of the present situation improved in March, primarily driven by more positive views of the current employment situation. Notably, the employment differential—those saying jobs are plentiful minus those saying jobs are hard to get—rose in March and has been trending higher this year.
Expectations for the next six months slipped to the lowest level since October 2023. Consumers’ outlook for future business conditions, labor market conditions, and income expectations all deteriorated in March. They were also a bit less optimistic about their family’s financial situation, both currently and over the next six months.
Sentiment about stock prices over the year ahead continued to strengthen. The share of consumers expecting an increase in interest rates over the year ahead rose above 50 percent for the first time since November 2023. On a six-month basis, buying plans for interest-rate-sensitive items like autos, homes, and big-ticket appliances dipped again.
Consumers were a bit less optimistic about their Family’s Financial Situation going forward.
While "experiential" spending, such as travel and dining, is anticipated to persist throughout the year, supported by a strong stock market, increasing incomes, and a favorable unemployment rate, concerns remain regarding financial security at year-end. Additionally, the dynamics of an election year contribute to heightened anxiety, impacting overall confidence levels, particularly concerning big-ticket items influenced by interest rates.
