Consumers are worried about the future of the economy, worried about the political scenario. economy

Consumer views about the present economy There was little change in March, although their outlook for the future worsened amid growing concerns over the US political climate.

The March consumer confidence index Released Tuesday by the Conference Board, the number dropped to 104.7 from 104.8 in February — basically unchanged. However, the current situation index rose to 151 from 147.6 a month ago, while the expectations index fell to 73.8 from 76.3 in February.

There were differences by income groups and age, with people in the income range of $50,000 to $99,999 expressing a decline in confidence compared to other income groups. People over the age of 55 were more confident than those under the age of 55, whose sentiments about the economic environment worsened.

“Consumers’ assessments of the current situation improved in March, but they also became more pessimistic about the future,” said Dana M. Peterson, chief economist at the Conference Board. “Confidence increased among consumers aged 55 and over, but decreased for those under 55. Separately, consumers in the $50,000-$99,999 income bracket reported less confidence in March, while confidence in all other income groups improved slightly. However, over the past six months, confidence has been moving sideways and there is no real trend upward or downward by income or age group.

“Recession fears continue to trend downwards,” Peterson said. Additionally, “consumers expressed greater concern about the U.S. political climate than in previous months.”

Economists and policymakers look to consumer surveys for indications of how the economy may perform, as consumers make up about 70% of total economic activity. But for some time, pollsters have indicated that there is a disconnect between what people tell them and what respondents actually do. For example, in 2023, most economists predicted a recession; Instead, consumers spent freely and the economy grew at a 2.5% annual rate, up from 1.9% in 2022. Meanwhile, the stock market rose 24%, as measured by the S&P 500.

“Although consumers are very happy with current conditions, they remain pessimistic about the future, which is understandable,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Inflation seems to be stuck above 3% for now, and food prices, a particular trouble point, don’t look set to fall anytime soon. Consumers are also familiar with rising prices in health care and auto ownership.

“That pessimism, combined with uneasiness over the political situation, is understandable, even though the economy should easily avoid recession this year, and the labor market should continue to strengthen.”

On Thursday, the government will report its final estimate of gross domestic product for the fourth quarter of last year, which is expected to gain 3.2%. Meanwhile, the Federal Reserve Bank of Atlanta’s GDP Now model is projecting growth of 2.1% for the first quarter ending Saturday.

The Federal Reserve Bank of Chicago’s measure of national economic activity also showed that the economy improved in February, dashing expectations that it would remain in negative territory. This growth was mainly attributed to increases in production, orders, inventory and employment metrics.

Last week, federal Reserve It raised its economic growth forecast this year to 2.1% from 1.4% estimated in December. and Fed Chairman Jerome Powell Hinted at a press conference The central bank is still trying to balance falling interest rates with the unexpected strength of the economy.

Powell said, “We’re in a situation where, if we ease too much or too early, we could see inflation come back, and if we ease too late, we could see a loss of jobs and people.” may cause unnecessary harm to the working life of “And so we see the risks as two-sided, so as this (first rate cut) is consequential, we want to be cautious; “And fortunately, with the economy growing, the labor market strengthening, and inflation coming down, we can think carefully about that question and let the data speak to it.”