WASHINGTON (AP) — U.S. consumer confidence has fallen for the fourth straight month as American anxiety about their financial futures fell to 12-year lows amid growing concerns about tariffs and inflation.
The conference committee reported Tuesday that its consumer confidence index fell to 92.9, down 7.2 points in March. Analysts were hoping to refuse a 94.5 read, according to a FactSet survey.
A meeting committee report on Tuesday said the measure of Americans' short-term expectations for income, business and job markets fell 9.6 points to 65.2.
The conference committee is the lowest measurement in 12 years, well below the 80 threshold. However, the proportion of consumers who expected a recession the following year had remained stable at nine months high, the board reported.
“Consumer optimism about future income, which had been very strong in the past few months, has largely disappeared, suggesting that concerns about the economy and labor market have begun to spread to consumer evaluations of personal circumstances.”
President Donald Trump's management has largely reduced consumer outlook and does not necessarily reflect what is happening in the real economy. This argument is similar to what former President Biden administration officials said because high inflation curtailed consumer trust without compromising growth.
“I don't think there has been a very strong correlation between trust data in recent years and actual consumer spending,” Economic Advisory Council Chairman Stephen Miran told CNBC on Tuesday. “You go out on the streets, people are roaming their lives, you know, they're getting their pay, they're spending their pay, the economy is marching ahead.”
The prospect of Trump's tariffs hampering growth has plagued both consumers and businesses while increasing inflationary pressures.
Walmart has been another strong year as shoppers withstanding inflation gathered at outlets to trade, but the country's biggest retailer has significantly reduced its profit forecast this year. Its sales outlook is also mild, potentially reflecting the challenges ahead as consumers pull back spending and tariffs in China and other countries and threaten Walmart's low-cost model.
Target's sales and profits slipped into a crucial holiday quarter. The company predicted that there would be “meaning pressure” in the profits of starting the year due to tariffs in Mexico, Canada and China.
Macy's, Best Buy, Abercrombie & Fitch, and others have also been cautious about their expectations for 2025, with many citing “economic uncertainty.”
However, Milan said that countries where tariffs are imposed will ultimately pay taxes. This is usually collected at US ports of entry. Most economists say that tariffs paid primarily by importers are passed to consumers and businesses in the form of higher prices.
A board survey showed a decline in both home and car purchase plans. However, given the anxiety of respondents given their anxiety about their future, it was surprisingly surprising, and their intention to purchase expensive items such as electrical appliances increased. The board said it would reflect a desire to buy before tariffs begin, leading to a rise in prices.
Inflation has recepped from its highs during the post-pandemic rebound, but has surpassed the Federal Reserve 2% target. Coupled with the announced tariffs on many imports, these still announced prices make Americans feel sour about spending as an economic concern.
Consumers appeared to be increasingly confident at the end of 2024, spending their generously during the holiday season. However, in January, US retail sales fell sharply, and cold weather took responsibility.
Earlier this month, the government reported that Americans had moderately strengthened their spending in February after a sharp pullback the previous month.
The board reported Tuesday that consumer views on current terms fell 3.6 points to 134.5.
The Consumer Trust Index measures both an assessment of the current economic situation of Americans over the next six months and its outlook.
Consumer spending accounts for about two-thirds of US economic activity, and is closely monitored by economists for indications about how American consumers feel.
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Associated Press Reporter Josh Bork contributed to this report.
