This week, the Conference Board’s consumer sentiment survey revealed a significant decline in consumer confidence, dropping to a four-year low of 93. The survey highlighted decreased expectations regarding business conditions, the labor market, and income prospects, hitting their lowest level since March 2013. Despite these concerns, the actual economic activity shows only a gradual slowdown. However, consumer sentiment is viewed as a potential leading indicator of future economic behavior, although recent predictions based on such data have been mixed, with political divisions further complicating their interpretation.
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Confidence is in Decline
In March, U.S. consumer confidence reached its lowest point in over four years, driven by concerns about potential recessions and rising inflation resulting from ongoing trade policies and tariffs. According to The Conference Board, a significant decline in consumer expectations regarding income, business, and labor market conditions was noted, reaching their lowest levels in 12 years. This decline indicates a historical marker that often precedes economic downturns.
The confidence index dropped 7.2 points to 92.9, the lowest since January 2021, contrasting with economists’ forecasts of a smaller decline to 94. This marked the fourth consecutive month of declining confidence, with stock market corrections contributing to the growing pessimism. Of particular concern is the measure of future expectations, which fell to 65.2, the lowest since 2013, illustrating increased pessimism about business conditions and employment prospects.
Different age groups exhibited varying confidence levels; those over 55 showed significant declines, while younger consumers under 35 saw a slight increase in confidence. Income levels also played a role; households with incomes above $125,000 showed more optimism compared to those with lower incomes.
The Potential Impact of Tariffs & Inflation
Trade policy uncertainties, particularly President Donald Trump’s fluctuating tariff announcements, have been identified as major contributors to the current decline in consumer sentiment. Responses from surveys highlighted growing concerns about these trade policies and their economic effects, signaling a broader concern about their impact on personal financial situations.
Inflation expectations have also surged to levels not seen in two years, driven by companies’ warnings of price hikes and decreased demand. Economists are now factoring in rising risks of stagflation, characterized by stagnant growth coupled with inflation, and an elevated likelihood of a recession.

Key Takeaways
Overall, the data indicate a consumer base that is growing increasingly anxious about economic prospects as geopolitical and economic policies sow uncertainty in the business environment. The downward trend in confidence and expectations underscores the importance of closely monitoring economic indicators to anticipate potential future economic challenges.