Consumer confidence drops to four-year low

On March 26, the Conference Board released the March 2025 Consumer Confidence Index. The index fell 7.2 points to 92.9—the lowest it has been since January 2021.

This dip was largely driven by sentiments among consumers 55 and older; to a lesser extent, consumers between 35 and 55 years old also contributed to the decline. However, consumer confidence among those under 35 rose slightly.

All income groups experienced a confidence drop, with the sole exception being those earning over $125,000 annually.

“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,” said Stephanie Guichard, senior economist, global indicators at The Conference Board. “Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low.”

The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—dropped 9.6 points to 65.2.

Economic expectations

The index indicates that many Americans expect higher inflation this year, and even more predict the U.S. economy will move into a recession. This resembles what some call “stagflation.”

The Federal Reserve, which is responsible for managing borrowing costs, appears to be adopting a “wait-and-see approach” with interest rates, holding them steady as they wait for additional economic clarity.