In March, the US Consumer Confidence Index made its largest one-month drop ever recorded. It tumbled to 92.9, a drop from 98.3 in February, as reported by the Conference Board. This is the lowest forecast since a reading of 55.9 in February 2021 and the fourth straight month of negative expectations. The steep decline reflects how consumers are growing more concerned about the direction of the economy. The index has now dropped below the slim range it held since 2022.
Of the three components of the Consumer Confidence Index, only consumers’ appraisal of current labor market conditions improved a little bit. At the same time, the Expectations Index, which measures short-term expectations for income, business, and employment, fell off a cliff. It dropped 9.6 points to 65.2, marking its lowest level in 12 years. Moreover, this drop brought it below the important 80 level, which has historically signaled incoming recessionary pressures.
The Present Situation Index also saw a drop, falling 3.6 points to 134.5. Consumers view business conditions as just shy of neutral on the recently released Present Situation Index. Their hopes for what was to come have become more and more dire. Pessimism about future business conditions increased across the board and optimism about future employment prospects fell to a 12-year low.
This renewed decline in consumer confidence comes as the US Dollar is experiencing a revival of selling pressure. Today, the US Dollar Index (DXY) finds itself once again testing the key support level at 104.00. This new development is another blow to consumers and the already precarious economic situation.