U.S. consumer confidence has fallen for the fourth consecutive month to a 12-year low amid growing concerns over tariffs and inflation.
The Conference Board revealed that the consumer confidence index dropped by 7.2 points in March to 92.9, lower than the anticipated 94.5 points.
The big picture: The measure of Americans’ short-term expectations for income, business, and the job market also experienced a significant decline, plummeting 9.6 points to 65.2.
- This marks the lowest reading in 12 years and raises concerns as it falls well below the threshold of 80, which can signal a potential recession.
Go deeper: Major retail businesses such as Walmart, Target, Macy’s, and Best Buy are cautious about their expectations for 2025, citing economic uncertainties influenced by tariffs and inflationary pressures.
- For instance, Walmart reduced profit forecasts due to inflation concerns, while Target is anticipating pressure on profits because of tariffs imposed on Mexico, Canada, and China.
- The board’s survey revealed a decline in purchasing plans for homes and cars, despite a surprising increase in intentions to buy big-ticket items like appliances. This uptick in buying may be driven by concerns about future tariff impacts leading to higher prices.
- Inflation, even though it has subdued from post-pandemic highs, continues to remain above the Federal Reserve’s 2% target, impacting consumer spending sentiment.
