US consumer confidence plunged to the lowest level in more than four years in March, with households fearing a recession in the future and higher inflation because of tariffs.
The Conference Board said on Tuesday that write-in responses to the survey showed “worries about the impact of trade policies and tariffs in particular are on the rise,” adding “there were also more references than usual to economic and policy uncertainty.” The survey’s measure of future expectations hit a 12-year low and breached a level associated with an economic downturn.
President Donald Trump’s on- and-off again tariffs have been panned by economists for sowing confusion and uncertainty that they said was making it challenging for business to plan ahead, to the detriment of the economy. Trump on Monday indicated that not all of his threatened duties would be imposed on April 2 and some countries may get breaks, but at the same time said tariffs on imported automobiles were coming soon.
“Consumers are rattled,” said Carl Weinberg, chief economist at High Frequency Economics. “At great personal risk, we will opine that the chaos in Washington has something to do with this. The decline in consumer sentiment since the November election can no longer be written off as a coincidence.”
The Conference Board said its consumer confidence index plunged 7.2 points to 92.9 this month, the lowest level since January 2021. Economists polled by Reuters had forecast the index sliding to 94.0.
The fourth straight monthly decline in confidence mirrored a similar deterioration in the University of Michigan’s consumer sentiment measure, which has also erased all the gains notched in the aftermath of Trump’s election victory in November.
The drop in confidence this month was driven by consumers over 55 years old. Morale among those in the 35-55 year age group also worsened. But confidence rose slightly among consumers under 35 years. Confidence slumped across income groups, with the exception of households earning more than $125,000 a year. Consumers had over the past few months been generally upbeat about future income.
“Consumers’ optimism about future income … largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations,” said Stephanie Guichard, senior economist, Global Indicators at the Conference Board.
