U.S. Consumer Confidence Hits 12-Year March Low/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. consumer confidence dropped for the fourth consecutive month, hitting its lowest level in 12 years. Americans are growing increasingly concerned about inflation, tariffs, and financial instability. Analysts warn that shrinking spending and rising debt may signal deeper economic trouble ahead.
U.S. Confidence Index Quick Looks
- March consumer confidence index fell to 92.9, below expectations.
- Short-term outlook index plunged to 65.2, lowest since 2013.
- A reading under 80 can indicate an approaching recession.
- Americans are scaling back spending amid rising inflation concerns.
- Credit card, auto loan, and home equity delinquencies are edging up.
- Consumer debt remains high as household budgets tighten.
- Student loan delinquencies will reappear on credit files this year.
- Financial firms warn of slowing loan growth, squeezed bank revenues.
- Retailers say customers are delaying purchases and seeking discounts.
- Consumer finance stocks have fallen sharply in recent weeks.
U.S. Consumer Confidence Hits 12-Year March Low
Deep Look
Consumer confidence in the United States declined sharply in March, marking the fourth consecutive monthly drop and reaching its lowest point in over a decade, according to a report released Tuesday by the Conference Board. The group’s consumer confidence index fell by 7.2 points to 92.9—far below the expected reading of 94.5—highlighting growing anxiety among Americans about their financial futures.
More significantly, the index measuring short-term expectations for income, employment, and business conditions plunged nearly 10 points to 65.2, the weakest reading since 2013. The Conference Board cautioned that any reading below 80 is typically a red flag for a potential recession.
Consumers’ assessment of current economic conditions also fell slightly, down 3.6 points to 134.5.
“Consumer confidence is now the lowest it’s been in 12 years, and Americans are clearly worried about what lies ahead,” said Matt Ott, reporting for the Associated Press. Economic concerns appear to be shifting spending habits as people prepare for more strained household budgets.
Financial analysts are seeing early warning signs. Consumer finance company Synchrony Financial noted that Americans are reducing spending across all income groups.
“Purchase volumes have gone down across the industry as consumers become more thoughtful about spending,” said Max Axler, the company’s chief credit officer.
While most consumers are still keeping up with their loan payments, Axler said that tightening spending is a signal that households are bracing for further financial stress. The Federal Reserve recently reported that delinquencies are creeping up across auto loans, credit cards, and home equity lines of credit.
Synchrony, which manages over 100 million credit card accounts, said it is monitoring consumer behavior closely, particularly with the resumption of federal student loan reporting. Beginning in mid-February, loan servicers resumed sending delinquency data to credit bureaus for the first time in five years. Analysts warn that many borrowers may begin to miss payments as the data continues to roll out through May 2025.
“For the first time in years, we’re going to see federal student loan delinquencies hit credit files again,” said Rikard Bandebo, Chief Economist at VantageScore. “With consumer debt already at elevated levels, this will stretch many borrowers to their limits.”
Retailers such as Walmart and Target have also observed changing consumer behavior. Shoppers are delaying purchases, switching to lower-cost alternatives, and waiting for deals. Analysts fear this pullback in household spending could foreshadow a deeper economic downturn.
“Consumers are vulnerable,” said HSBC banking analyst Saul Martinez. “Loan growth has slowed considerably across the financial industry, and that translates to reduced bank earnings and pressure on interest income.”
According to HSBC, year-over-year loan growth across the banking sector slowed by 5% to 12% in February. Financial stocks have taken a hit as a result. Shares of leading consumer lenders like American Express, Capital One, Synchrony, and Discover have dropped between 15% and 22% in the past month alone.
Adding to the pressure, inflation expectations are now at their highest levels since 1993. Some economists have pointed to the Trump administration’s sweeping tariffs as a potential trigger for rising prices and weaker economic growth.
Philadelphia Federal Reserve President Patrick Harker echoed those concerns, noting that signs of stress are building in the consumer sector.
All eyes are now on consumer behavior, which drives approximately two-thirds of U.S. economic activity. If Americans continue to pull back, the effects will ripple across the economy—impacting credit markets, retail, and broader economic growth.
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