Stalled Confidence: Consumers Hold Steady Despite Concerns About Future

Consumer confidence remained stable in March, with optimism about current conditions offset by concerns about the future economic outlook.

This pessimism was primarily driven by persistent inflation, particularly high food and gas prices.

The Consumer Confidence Index, reported by the Conference Board, remained virtually unchanged at 104.7 in March, marking the lowest level since November 2023.

The Present Situation Index rose 3.4 points from 147.6 to 151.0, while the Expectation Situation Index fell 2.5 points from 76.3 to 73.8.

Historically, an Expectation Index reading below 80 often signals a recession within a year.

Consumers’ assessment of current business conditions showed little change in March. While the share of respondents rating business conditions as ‘good’ decreased slightly (0.9 percentage points to 19.5%), those claiming ‘bad’ conditions also fell (0.5 percentage points to 17.2%).

Meanwhile, consumers’ assessments of the labor market were more positive. The share of respondents reporting that jobs were “plentiful” increased by 0.3 percentage points, while those who saw jobs as “hard to get” fell by 1.8 percentage points.

Likewise, consumers were more pessimistic about the short-term outlook. While the share of respondents expecting business conditions to improve rose slightly (from 14.0% to 14.3%), those expecting conditions to deteriorate increased as well (from 16.9% to 17.6%).

Similarly, expectations of employment over the next six months were less favorable. The share of respondents expecting “more jobs” decreased slightly (by 0.2 percentage points to 13.9%), and those anticipating “fewer jobs” increased (by 0.7 percentage points to 18.2%).

Additionally, the Conference Board reported an increase in the share of respondents planning to buy a home within six months. The share climbed to 4.9% in March.

Of those, respondents planning to buy a newly constructed home remained at 0.3%, and those planning to buy an existing home increased to 2%.

(Read more on Eyeonhousing.org)