U.S. Consumer Sentiment Drops to 53.3

(MENAFN) American consumer confidence took a sharp hit in March, with sentiment plunging 6 percent as surging gas prices, turbulent financial markets, and the deepening Iran conflict eroded household optimism, according to a closely watched survey released Friday.

The University of Michigan (UM) Surveys of Consumers reported that its U.S. Consumer Sentiment Index dropped to 53.3 in March 2026, retreating from 56.6 in February and falling below last March's already-depressed reading of 57.

The deterioration cut across all major sub-indices. The Current Economic Conditions Index slid to 55.8 from 56.6 in February, undershooting last March's 63.8. The Index of Consumer Expectations fell to 51.7, down from 56.6 in February and below last March's 52.6.

The data revealed particular alarm over energy costs — year-ahead gas price expectations surged approximately fivefold from February, hitting their highest reading since June 2022. Year-ahead expectations for personal finances dropped 10 percent, with 47 percent of respondents volunteering unprompted that rising prices are straining their household budgets.

The short-term economic outlook cratered 14 percent, as 61 percent of consumers now anticipate unemployment will rise over the coming year, up from 58 percent in February.

Inflation anxieties intensified as well. Year-ahead inflation expectations climbed from 3.4 percent in February to 3.8 percent in March — the steepest single-month jump since April 2025 — surpassing readings recorded throughout 2024.

UM Surveys of Consumers Director Joanne Hsu cautioned that the damage could deepen depending on how events unfold.

"These views are subject to change, however, if the Iran conflict becomes protracted or if higher energy prices pass through to overall inflation," said Hsu.

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