The Consumer Confidence Index dropped 8.6 points in March to 63.4, down from 72 in February.
An index of 100 is associated with a growing economy.
While the present situation index improved to 36.9 from 33.8 in March, the expectations index lost 16.4 points, from 97.5 in February to 81.1 in March.
Consumers’ assessment of current conditions improved in March. Those claiming business conditions are “good” increased to 15.1% from 12%, while those claiming business conditions are “bad” decreased to 37% from 39.3%. Consumers’ appraisal of the job market, however, was slightly less favorable than in February. Those saying jobs are “hard to get” increased slightly to 44.6% from 44.4%, while those stating jobs are “plentiful” slipped to 4.4% from 4.9%.
Consumers’ short-term outlook was less favorable than in February. Consumers expecting business conditions to improve over the next six months declined to 20.6% from 25.2%, while those anticipating business conditions will get worse increased to 16.2% from 10.3%. Those expecting more jobs in the months ahead dropped to 19.9% from 21.2%, while those anticipating fewer jobs rose to 20.7% from 15%. The proportion of consumers expecting an increase in their incomes declined to 15.3% from 17.4%.
“The sharp decline in confidence was prompted by a sharp decline in expectations. Consumers’ inflation expectations rose significantly in March and their income expectations soured, a combination that will likely impact spending decisions,” said Lynn Franco, director of The Conference Board Consumer Research Center. “On the other hand, consumers’ assessment of current conditions improved, indicating that while the short-term future may be uncertain, the economy continues to expand.”