U.S. consumer confidence slumped to a nearly five-year low in March as growing concerns over tariffs weighed on the economic outlook.
The Conference Board said on Tuesday its consumer confidence index dropped 7.9 points to 86.0 this month, the lowest reading since May 2020. Economists polled by Reuters had forecast the index sliding to 87.5.
The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell 0.9 point to 133.5. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, slid 12.5 points to 54.4 – the lowest level since October 2011 and well below the threshold of 80 that usually signals a recession ahead.
“Consumer confidence declined for a fifth consecutive month in April, falling to levels not seen since the onset of the COVID pandemic,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board.
The government is expected to report on Wednesday that economic growth braked sharply in the first quarter, amid a surge in imports as businesses raced to bring in goods to avoid higher costs from duties.
Consumer spending also likely slowed down considerably, hampered by still-high inflation as well as worries about the impact of tariffs on the economy, which prompted some households to cut back on consumption to preserve savings.
Gross domestic product likely increased at a 0.3% annualized rate in the January-March quarter, which would be the weakest since the second quarter of 2022, a Reuters survey showed.
Risks are tilted to the downside. The Atlanta Federal Reserve is forecasting GDP declining at a 0.4% rate after adjusting for imports and exports of gold. The economy grew at a 2.4% pace in the fourth quarter.
Source: Reuters
