Down in four out of the past five months, consumer confidence is in a soft patch. It is still elevated by historical standards so we’re not yet worried about a retrenchment in spending, but last year’s sugar high has worn off.
Consumer Confidence Slips in March
- Consumers’ confidence continued to moderate in March, with the consumer confidence index falling 7.3 points to 124.1. That puts the index 13.8 points below where it was in October—before confidence was shaken in the final two months of last year.
- The stock market selloff late last year likely played a role, and though equities have retraced some lost ground, the marketrelated dent to confidence has yet to be fully restored.
Some Softening in the Tight Labor Market
- Confidence is also a reflection of the labor market—which remains supportive of sentiment—but is starting to show some cracks in the foundation. The share of consumers who see jobs as plentiful fell to the smallest share since June even as those who see jobs as hard to get rose for the second time in two months.
- Gas prices were largely higher in March, which may be behind the rise in average inflation expectations, a bit of a trend reversal.
