US consumer confidence edged higher in March, with the Conference Board index rising from 91.0 to 91.8, beating expectations of 88.3. The improvement was driven by a stronger assessment of current conditions, with the Present Situation Index jumping from the previous month by 4.6 points to 123.3. However, the forward-looking picture deteriorated. The Expectations Index fell from 72.6 to 70.9, remaining below the 80 threshold typically associated with recession signals.
The divergence highlights a consumer base that sees current conditions as stable but remains increasingly cautious about the outlook, particularly as geopolitical risks and rising costs weigh on sentiment.
Inflation concerns are clearly re-emerging as a dominant theme. Survey responses showed heightened worries about the cost of living, with mentions of oil, gas, and war rising sharply alongside the Iran conflict. Consumers’ 12-month inflation expectations surged to levels last seen in August 2025, while expectations for higher interest rates jumped markedly, from 34.9% to 42.4%.
