A popular measure of consumer confidence fell for the fourth straight month in March amid growing concerns about the strength of the economy.
The Conference Board said Tuesday that its monthly consumer confidence measure fell 7.2 points in March to 92.9, a larger drop than anticipated. (The index is anchored to 1985, which equals 100.) The decline was broad-based across income groups, with all segments except those earning more than $125,000 reporting a drop in confidence.
A narrower index that measures attitudes about short-term expectations for income, business and the job market fell 9.6 points to 65.2. That’s the lowest level in 12 years and below the threshold of 80 that serves as a signal that a recession may be coming.
At the same time, the present situation index, which is based on current conditions, decreased by a more modest 3.6 points to 134.5, suggesting that consumers are more worried about what lies ahead than what they are experiencing right now.
“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,” said economist Stephanie Guichard of The Conference Board.
The White House said the report has limited usefulness. “I just don’t think that there’s been a very strong correlation between the confidence data and actual consumer spending in recent years,” Stephen Miran, the chairman of the Council of Economic Advisers, told CNBC. “You go out in the street, people are going about their lives, you know, they’re getting their paychecks, they’re spending their paychecks, the economy is marching on ahead.”
But critics of the Trump administration’s economic policies, which include punitive tariffs and massive layoffs in the federal government, said the White House is to blame for the decline in confidence. “Trump's presidency has made Americans as pessimistic as they were during a pandemic-induced economic crisis,” said Steve Rattner, who served as an adviser to the Treasury secretary during the Obama administration.