Consumer sentiment plummeted 12% in March, falling for the third straight month.

While current economic conditions were little changed, the forward-looking expectations index plunged a precipitous 18% and has now lost more than 30% since November 2024, said economist Joanne Hsu, director of the University of Michigan’s Surveys of Consumers.

This month’s decline reflects a clear consensus across all demographic and political affiliations; Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment and inflation. 

“Overall, consumers perceive a tremendous amount of uncertainty in the economy—policy uncertainty, market uncertainty, general economic uncertainty, among others,” Hsu said. “The fact that expectations worsened across the board suggests that consumers perceive more downside than upside risk for the foreseeable future; these views will likely dampen consumers’ willingness to spend or make investments.”

Outlook weakens for labor markets and personal finances

Two-thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009. In addition, consumers are increasingly worried that their income prospects may be worsening as well.

Consumers downgraded their stock market expectations for the third month in a row, reaching its lowest reading since March 2023, Hsu said. These patterns are notable because robust consumer spending over the past few years has been supported by strong labor markets, reliable incomes and booming stock markets.

Interviews this month reveal that consumers believe all of these supporting factors may be weakening. Even high-income consumers are concerned about their personal finances: only 26% of them expect to be better off financially in a year, down from 42% in August 2024. 

Widespread unease about economic policy

Consumers continue to express increasing unease about economic policy developments. About 44% of consumers this month spontaneously mentioned tariffs during interviews, up from 40% in February. This figure includes the 40% of independents who referenced tariffs, showing that these concerns are not limited to Democrats in opposition to Trump. 

Critically, these consumers generally expect tariffs to generate substantial upward pressure for inflation in the future. Gasoline inflation expectations also escalated this month to their highest readings since October 2024 over both short- and long-time horizons. 

Consumer Sentiment Index  

The Consumer Sentiment Index fell to 57.0 in the March 2025 survey, down from 64.7 in February and below last March’s 79.4. The Current Index fell to 63.8, down from 65.7 in February and below last March’s 82.5. The Expectations Index fell to 52.6, down from 64.0 in February and below last March’s 77.4.

About the surveys

The Surveys of Consumers is a rotating panel survey at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that gives each household in the coterminous U.S. an equal probability of being selected. Interviews are conducted throughout the month by web. The minimum monthly change required for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Index and Expectations Index, the minimum is 6 points.