The Conference Board's Consumer Confidence Index declined for the fourth straight month in March to 92.9, down from a revised 100.1 (previously 98.3) in February, and below expectations of 94.2 in the Econoday survey of forecasters.

Consumers' assessment of current business and labor market conditions fell again, while their short-term outlook for income, business, and labor market conditions experienced another sharp decline.

The Expectations Index dropped to the lowest level in 12 years and well below the threshold of 80 that usually signals a recession ahead.

There are no bright spots in the report.

Of the Index's five components, only consumers' assessment of present labor market conditions improved, albeit slightly. Views of current business conditions weakened to close to neutral. Consumers' expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low.

The Conference Board said the share of consumers expecting a recession over the next 12 months remained steady at a nine-month high, with expectations for future finances falling to the lowest level since July 2022.

[C]onsumers' optimism about future incomewhich had held up quite strongly in the past few monthslargely vanished, suggesting worries about the economy and labor market have started to spread into consumers' assessments of their personal situations, the report said.

Average one-year inflation expectations jumped to 6.2 percent in March from 5.8 percent in February. [C]onsumers remained concerned about high prices for key household staples like eggs and the impact of tariffs, the report said.

On a six-month moving average basis, purchasing plans for both homes and autos declined. However, plans to buy big-ticket itemsincluding appliances and electronicssaw an uptick, which may reflect plans to buy before impending tariffs lead to price increases, the Conference Board said.

Consumers are in a funk. Another decline to 94.2 is the call for March, down from 98.3 in February,105.3 in January and 109.5 in December. Consumers are fretting over the economic outlook, their family finances and they see rising inflation.

The Conference Board's confidence report surveys consumers on their assessments of the labor market, business activity, and their own financial conditions. The survey is conducted by Toluna, an online community platform. (Conference Board and Toluna)

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer confidence index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.