What: "U.S. consumer confidence hits 12-year low in expectations component as inflation concerns intensify and tariff worries mount, signaling potential shifts in spending patterns."

Why it is important: "The combination of historically low consumer expectations and rising price concerns signals a fundamental shift in consumer psychology that could impact discretionary spending and retail strategy."

Consumer confidence continues to deteriorate as March marks the fourth consecutive monthly decline, with the expectations component reaching its lowest level in 12 years. This deepening malaise reflects growing uncertainty about inflation, job prospects, and future business conditions. Inflation concerns have intensified, with median expected rates jumping from 5.8% to 6.2% in March, while anxiety about tariff-driven price increases threatens discretionary purchasing. The shift in consumer information sources adds another layer of complexity, with nearly half of all consumers now relying on social media platforms for daily news, particularly among younger demographics. This trend coincides with a broader decline in American happiness, with the U.S. ranking 24th globally, driven largely by younger adults' diminishing satisfaction. While a stock market rally might temporarily alleviate some concerns, the fundamental shift in consumer psychology suggests deeper challenges ahead for maintaining spending levels.

IADS Notes: Recent market analyses reveal deepening concerns about consumer confidence and spending patterns. According to Visa's report in March 2025 , consumer confidence hit a three-year low, with inflation expectations surging to 6.0% and significant anxiety about economic conditions. The Financial Times' coverage in February 2025 highlighted how Trump's tariff announcements triggered widespread consumer concern, with the Conference Board's Consumer Confidence Index showing its sharpest decline since 2021. This trend was foreshadowed in Visa's July 2024 analysis , which documented a sustained pattern of consumer unease, despite relative stability in the labor market. Forbes' March 2025 report further quantified these concerns, projecting annual household cost increases of USD 1,200 due to tariffs, with specific sectors facing price increases ranging from 0.81% to 1.63%. This convergence of factors - rising inflation expectations, tariff concerns, and declining consumer confidence - suggests a fundamental shift in consumer behavior, with particular impact on discretionary spending and retail strategy adaptation.

American customers: confidence loses more ground in March