US Consumer Confidence Declines for Third Successive Month Amid Tariff Uncertainty
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Synopsis
In March, US consumer sentiment experienced a decline for the third successive month due to growing economic concerns amid tariff uncertainty. A report indicated a 10.5% drop in sentiment, with significant declines across all demographics, reflecting a pervasive atmosphere of uncertainty regarding future economic conditions.
Key Takeaways
- US consumer sentiment fell by 10.5% in March.
- Current conditions remained stable, but future expectations deteriorated.
- Inflation expectations rose to 4.9% for the next year.
- Long-term inflation expectations increased from 3.5% to 3.9%.
- Uncertainty in policies complicates future consumer planning.
Washington, March 15 (NationPress) US consumer sentiment in March has declined for the third consecutive month as worries about the economy have escalated amidst tariff turmoil, according to a report.
The consumer sentiment index dropped another 10.5 percent this month, with declines observed uniformly across all demographics, including age, education, income, wealth, political affiliations, and geographic locations, as reported by the University of Michigan's latest survey, which recorded a value of 57.9.
This recent statistic is 27.1 percent lower compared to March of the prior year, as reported by Xinhua news agency.
While current economic conditions remained relatively stable, expectations for the future have worsened across numerous areas of the economy, which includes personal finances, employment markets, inflation rates, business environments, and stock exchanges, according to the survey.
Many consumers expressed concerns regarding the high levels of uncertainty surrounding policy and various economic factors; frequent fluctuations in economic policies complicate future planning for consumers.
Inflation expectations over the next year surged from 4.3 percent last month to 4.9 percent this month, the highest level since November 2022, marking three consecutive months of significant increases of 0.5 percentage points or more, as noted by the survey.
Long-term inflation expectations rose from 3.5 percent in February to 3.9 percent in March, representing the largest month-over-month increase since 1993.
Joanne Hsu, director of the survey, remarked, “Many consumers pointed to the significant uncertainty surrounding policies and other economic factors.” She noted that the constant changes in economic policies make it difficult for consumers to plan ahead, regardless of their political leanings.
She added, “Consumers across all political affiliations agree that the outlook has deteriorated since February.”
Simultaneously, US President Donald Trump has enacted a series of tariffs on a wide range of products from key trading partners, including Canada, China, and the European Union, which has resulted in retaliatory tariffs from these nations. Some tariffs were introduced initially and then suspended for a month.
On March 13, Trump threatened to implement a 200 percent tariff on European imports, including wine, cognac, and other alcoholic beverages.
