The Conference Board reported a modest increase in US consumer confidence in March, with the index rising to 91.8 from 91 in February. This uptick was largely driven by the perception that rising costs due to tariffs and oil prices would not affect the overall confidence reading. However, other measures of the survey showed increasing pessimism about inflation expectations and business conditions.
The Conference Board attributed the modest increase in consumer confidence to a decline in concerns about recession, with respondents expressing less anxiety about job losses and economic downturns. Despite this, the board noted that rising energy prices were having a significant impact on households, particularly those living in areas with high gas prices. The national average for regular gasoline rose above $4 per gallon for the first time since 2022.
The surge in US gas prices was attributed to the war in Iran, which caused fuel prices to soar worldwide. Motor club AAA reported that the national average for a gallon of regular gasoline is now $4.02, up more than a dollar before the war began. This marks the first time since 2022 that US drivers have collectively paid this much at the pump.
The impact of rising energy prices on consumer confidence was evident in the responses of respondents to the survey. Comments about oil, gas, and the war spiked, with consumers expressing concerns about inflation and their ability to afford basic necessities. The 12-month inflation expectations surged to levels last seen in August 2025, highlighting the ongoing anxiety over tariffs and global events.
The increase in consumer confidence was modest, but it does suggest that households are adapting to rising energy prices. However, this resilience may be short-lived, as Navy Federal Credit Union chief economist Heather Long warned that consumers may begin to cut back on purchases in the second quarter as the worst of the inflation shock hits. This could have significant implications for consumer spending and economic growth.
Long's warning was echoed by a decline in Americans' short-term expectations for their income, business conditions, and the job market. The measure fell 1.7 points to 70.9, remaining well below 80, a marker that can signal a recession ahead. This is the 14th consecutive month that reading has come in under 80.
The ongoing impact of global events on household budgets highlights the need for policymakers to consider the effects of rising energy prices on consumer confidence. As the war in Iran enters its second month, it remains to be seen whether oil price shocks will turn into demand destruction shocks. The resilience of US consumer confidence in the face of rising energy prices is a testament to the ongoing adaptability of households.
The full report from The Associated Press provides further insight into the trends and patterns shaping US consumer confidence. As the economic landscape continues to evolve, it will be important for policymakers and businesses to monitor these developments closely and adjust their strategies accordingly.
The resilience of US consumer confidence in the face of rising energy prices highlights the ongoing impact of global events on household budgets.
