WASHINGTON (AP) 鈥 U.S. consumer confidence fell for the fourth straight month as Americans' anxiety about their financial futures declined to a 12-year low amid rising concern over tariffs and inflation.
The Conference Board reported Tuesday that its consumer confidence index fell 7.2 points in March to 92.9. Analysts were expecting a decline to a reading of 94.5, according to a survey by FactSet.
The Conference Board鈥檚 report Tuesday said that the measure of Americans鈥 short-term expectations for income, business and the job market fell 9.6 points to 65.2.
It is the lowest reading in 12 years and well below the threshold of 80, which the Conference Board says can signal a potential recession in the near future. However, the proportion of consumers anticipating a recession in the next year held steady at a nine-month high, the board reported.
鈥淐onsumers鈥 optimism about future income 鈥 which had held up quite strongly in the past few months 鈥 largely vanished, suggesting worries about the economy and labor market have started to spread into consumers鈥 assessments of their personal situations,鈥 said Stephanie Guichard, senior economist at The Conference Board.
The administration of President Donald Trump has largely played down the decline in consumers' outlook, saying it doesn鈥檛 necessarily reflect what鈥檚 happening in the actual economy. This argument is similar to what officials in former President Biden's administration said as high inflation suppressed consumer confidence without undermining growth.
鈥淚 just don鈥檛 think that there鈥檚 been a very strong correlation between the confidence data and actual consumer spending in recent years,鈥 Stepehn Miran, the chairman of the Council of Economic Advisers, told CNBC on Tuesday. 鈥淵ou go out in the street, people are going about their lives, you know, they鈥檙e getting their paychecks, they鈥檙e spending their paychecks, the economy is marching on ahead.鈥
The prospect of Trump鈥檚 tariffs hampering growth while increasing inflationary pressures has distressed both consumers and businesses.
Walmart turned in another strong year as inflation-weary shoppers flocked to their outlets for deals, but the nation鈥檚 largest retailer for this year. Its sales outlook was also mild, potentially a reflection of challenges ahead as consumers pull back on spending and and threaten Walmart鈥檚 low-price model.
Target鈥檚 sales and profit slipped during the crucial holiday quarter, and the company predicted that there would be 鈥渕eaningful pressure鈥 on its profits to start the year in part because of tariffs on Mexico, Canada and China.
, Best Buy, and others also have grown cautious about their expectations for 2025, with many citing 鈥渆conomic uncertainty.鈥
However, Miran said he believes that the countries on which the tariffs are imposed will ultimately pay the taxes, which are usually collected at the ports of entry in the United States. Most economists say the tariffs, primarily paid by importers, would be passed along to consumers and businesses in the form of higher prices.
The board鈥檚 survey showed that purchasing plans for both homes and cars declined. However, in somewhat of a surprise given respondents鈥 anxiety about the future, intentions to buy big-ticket items like appliances increased. The board said that could reflect a desire to buy before the tariffs kick in, leading to price increases.
While inflation has retreated from the highs during the post-pandemic rebound, it has remained above the Federal Reserve鈥檚 2% target. Those still-elevated prices, combined with the announced tariffs on many imported goods, have Americans feeling sour about spending as mount.
Consumers appeared increasingly confident heading into the end of 2024 and spent generously during the holiday season. However, U.S. retail sales dropped sharply in January, with cold weather taking some of the blame.
Earlier this month, the government reported that Americans modestly stepped up their spending in February after .
The board reported Tuesday that consumers鈥 view of current conditions decreased 3.6 points to 134.5.
The consumer confidence index measures both Americans鈥 assessment of current economic conditions and their outlook for the next six months.
Consumer spending accounts for about two-thirds of U.S. economic activity and is closely watched by economists for signs about how the American consumer is feeling.
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Associated Press reporter Josh Boak contributed to this report.
