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In March 2025, the Conference Board's Consumer Confidence Survey showed a significant decline in household sentiment, further deepening worries about the state of the economy. Key findings from the survey include:
Forward-Looking Expectations: The index for future expectations, covering income, business, and labor-market conditions, fell to 65.2 — the lowest level in 12 years. A score below 80 often signals recessionary concerns, raising alarms about a potential economic slowdown.
Current Situation: The index for consumers’ view of the current economic situation dropped 7.2 points to 92.9, marking the fourth consecutive month of decline. This suggests a sustained period of negative sentiment.
Labor Market: Slightly improving, 33.6% of consumers now see jobs as plentiful, unchanged from the prior month, while 15.7% believe jobs are hard to get, a slight decrease from 16% in February.
Inflation & Trade Worries: Inflation remains a major concern, and fears surrounding trade policies and tariffs are growing, as highlighted by the write-in responses from the survey.
What’s Behind the Decline?
This decline in confidence coincides with broader concerns about economic growth, especially as consumers express unease over ongoing inflation and the impact of tariffs. Despite relatively stable backward-looking data, such as unemployment rates and GDP growth, analysts fear that a prolonged negative shift in sentiment could lead to a self-fulfilling recession.
Looking Ahead:
Another survey from University of Michigan shows 27% decline in sentiment over the past year, underscoring widespread economic uncertainty.
A Philadelphia Fed survey also pointed to a sharp drop in business activity, reflecting the broader concerns about economic health.
Conclusion:
The consumer sentiment drop in March, alongside concerns about tariffs and inflation, suggests that many Americans are preparing for potential economic headwinds. As Jackson Garton, CIO of Makena Capital Management, notes, sentiment can rapidly shift — both negatively and positively — potentially influencing future economic activity.
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