Rising inflation and economic uncertainty are taking a toll on US consumers
Consumer confidence in the US continued its downward trajectory in March, marking the third consecutive month of decline, according to the University of Michigan’s latest Survey of Consumers.
As reported by CNBC, the final reading of the index stood at 57.0, down 11.9% from February and 28.2% from the same period last year.
The figure fell short of the mid-month estimate of 57.9 projected by economists surveyed by Dow Jones.
The decline in sentiment was widespread, affecting consumers across income levels and political affiliations.
Joanne Hsu, director of the survey, told CNBC that respondents remain uncertain about economic conditions amid ongoing policy developments.
“Consumers continue to worry about the potential for pain amid ongoing economic policy developments,” said Hsu.
Expectations for the future also weakened. The survey’s index measuring consumer outlook dropped to 52.6, reflecting a 17.8% decline from February and a 32% drop from March 2024. CNBC noted that this decline in consumer expectations comes as inflation concerns remain a primary driver of economic uncertainty.
Respondents forecast inflation to reach 5% over the next year, representing a 0.1 percentage point increase from the mid-month estimate and a 0.7 percentage point rise from February.
Long-term inflation expectations, covering a five-year period, climbed to 4.1%, the highest level recorded since February 1993, according to CNBC’s coverage of the report.
Economic analysts continue to assess the impact of federal trade policies on consumer costs.
Some economists, as cited by CNBC, caution that tariff measures proposed by President Donald Trump could lead to further price increases, which may affect the Federal Reserve’s ability to adjust interest rates.
On the same day the survey was released, the US Commerce Department reported that core inflation rose to 2.8% in February, with a 0.4% monthly increase—the largest since January 2024. CNBC’s market analysts highlighted that these inflationary pressures add to the concerns already reflected in the sentiment index.
Labor market uncertainties were also evident in the survey results, with the percentage of consumers expecting unemployment to rise reaching its highest level since 2009.
Following the release of the consumer sentiment report, stock markets reacted negatively. CNBC reported that the Dow Jones Industrial Average fell by more than 500 points, signaling investor unease over persistent inflation concerns and economic uncertainty.
