Conference Board Consumer Expectations Plunge To 12 Year Lows; Inflation Expectations Rise

Another day, another sentiment measure disappoints…

The Conference Board Consumer Confidence headline print fell from 100.1 (upwardly revised) to 92.9 (below 94.0 exp). Under the hood, it was not pretty with the measure of expectations for the next six months dropped nearly 10 points to 65.2, the lowest in 12 years, while a gauge of present conditions declined more modestly.

Source: Bloomberg

“Consumer confidence declined for a fourth consecutive month in March, falling below the relatively narrow range that had prevailed since 2022,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. 

“Of the Index’s five components, only consumers’ assessment of present labor market conditions improved, albeit slightly. Views of current business conditions weakened to close to neutral. Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low. 

Meanwhile, consumers’ optimism about future income—which had held up quite strongly in the past few months—largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.”

Labor market conditions stabilized very modestly from their very recent downtrend…

Source: Bloomberg

Likely in response to recent market volatility, consumers turned negative about the stock market for the first time since the end of 2023. 

In March, only 37.4% expected stock prices to rise over the year ahead – down nearly 10 percentage points from February and 20 percentage points from the high reached in November 2024. On the flip side, 44.5% expected stock prices to decline (up 11 ppts from February and over 22 ppts more than November 2024). 

Meanwhile, average 12-month inflation expectations rose again – from 5.8% in February to 6.2% in March – as consumers remained concerned about high prices for key household staples like eggs and the impact of tariffs… still well below the chaos monkeys at UMich…

Finally, we noted that March’s fall in confidence was driven by consumers over 55 years old and, to a lesser extent, those between 35 and 55 years old. By contrast, confidence rose slightly among consumers under 35, as an uptick in their assessments of the present situation more than offset gloomier expectations. The decline was also broad-based across income groups, with the only exception being households earning more than $125,000 a year.