The sentiment of American consumers worsened sharply in March.
The Conference Board reported on the 25th (local time) that the Consumer Confidence Index for the U.S. in March stood at 92.9 (based on 1985 = 100), a decrease of 7.2 points compared to February.
The Conference Board's Consumer Confidence Index is a soft economic indicator based on surveys, distinguishing it from hard indicators based on actual economic activities such as employment, consumption, and investment. However, it is considered a leading indicator of the real economy in that it reflects the sentiment of economic agents.
The 'Current Situation Index,' which reflects consumers' evaluations of the current business and labor market conditions, fell by 3.6 points to 134.5. The 'Expectations Index,' which reflects consumers' short-term outlook on income, business, and the labor market, plummeted by 9.6 points to 65.2, marking the lowest level in 12 years. The Expectations Index is calculated based on the short-term outlook of consumers regarding income, business, and labor market conditions.
When the Expectations Index falls below the 80 mark, it is typically interpreted as a warning sign of recession. The Expectations Index dropped below 80 in February.
Stephanie Gisser, a senior economist at the Conference Board, said, “The optimism of consumers regarding future income, which had been quite strong over the past few months, has largely disappeared,” and noted, “This suggests that concerns about the economy and labor market have begun to spread to consumers' evaluations of their personal situations.”