Consumer confidence plummeted by 12% in March, marking the third consecutive month of decline.

Although the prevailing economic conditions showed minimal alteration, the anticipatory expectations index sank sharply by 18%, having now declined over 30% since November 2024, noted economist Joanne Hsu, director of the University of Michigan’s Surveys of Consumers.

This month’s downturn illustrates a clear agreement among all demographic and political groups; Republicans joined independents and Democrats in sharing increasingly pessimistic views since February regarding their personal finances, business circumstances, unemployment, and inflation.

“In general, consumers are overwhelmed by significant uncertainty in the economy—policy unpredictability, market fluctuations, general economic instability, among other factors,” Hsu remarked. “The fact that expectations have deteriorated across the board indicates that consumers perceive greater downside risks than upside potential for the near future; these sentiments will likely lessen consumers’ readiness to spend or invest.”

Prognosis dims for job markets and individual finances

Two-thirds of consumers anticipate a rise in unemployment over the next year, the highest level since 2009. Additionally, consumers are increasingly concerned that their income expectations may also be declining.

For the third consecutive month, consumers have lowered their stock market forecasts, reaching the lowest level since March 2023, Hsu mentioned. These trends are noteworthy because strong consumer expenditures in recent years have relied on robust job markets, stable incomes, and flourishing stock markets.

Interviews conducted this month show that consumers believe all of these supportive elements may be deteriorating. Even individuals with high incomes express worry about their finances: only 26% expect to be in a better financial position in a year, a decrease from 42% in August 2024.

Widespread anxiety regarding economic policy

Consumers are increasingly voicing concerns about economic policy changes. Approximately 44% of consumers this month spontaneously mentioned tariffs during discussions, up from 40% in February. This statistic includes the 40% of independents who brought up tariffs, indicating that these worries are not restricted to Democrats opposing Trump.

Crucially, these consumers generally anticipate tariffs will exert significant upward pressure on inflation in the future. Expectations for gasoline inflation also surged this month to their highest levels since October 2024 for both short- and long-term periods.

Consumer Sentiment Index

The Consumer Sentiment Index dropped to 57.0 in the March 2025 survey, down from 64.7 in February and lower than last March’s figure of 79.4. The Current Index decreased to 63.8, down from 65.7 in February and below last March’s score of 82.5. The Expectations Index fell to 52.6, down from 64.0 in February and less than last March’s 77.4.

About the surveys

The Surveys of Consumers represents a rotating panel survey conducted at the University of Michigan Institute for Social Research. It is constructed from a nationally representative sample that ensures each household within the contiguous U.S. has an equal chance of selection. Interviews are carried out throughout the month via web. The minimum monthly change necessary for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Index and Expectations Index, the minimum requirement is 6 points.