Americans Are More Confident About The Economy Than Expected—Despite Inflation Worries

Topline

The consumer confidence index increased unexpectedly in March as more Americans expressed upbeat views on the job market, but long-term pessimism remained amid worries over inflation and the Iran war, the Conference Board think tank reported Tuesday.

Views on the U.S. economy remained pessimistic.

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Key Facts

The consumer confidence index, a monthly reading of how optimistic or pessimistic Americans feel about the economy, rose to 91.8 in March from 91 in February, the Conference Board said.

That came above consensus analyst estimates of 88, according to FactSet.

Any reading above the Conference Board’s 100-point baseline set in 1985 reflects more optimism among consumers, whereas any value below the benchmark points to more caution.

Dana Peterson, the Conference Board’s chief economist, said an uptick in consumer confidence reflected a “modest improvement” in views of current business and labor conditions, which Peterson said outweighed a “slight downshift” in long-term expectations.

About 27.3% of consumers said jobs were “plentiful” in March, up from 26.7% in February and above the increase for those who said jobs were “hard to get,” rising from 21% in February to 21.5% in March.

How Do Americans Feel About The Future?

Despite a downturn in pessimism in March, consumers’ expectations for the next year deteriorated. The average and median estimates for inflation over the next year rose to their highest levels since August 2025, largely due to worries about rising oil costs brought on by the Iran war, the Conference Board said. About 42% of consumers said they expect interest rates to be higher over the next 12 months, up from just under 35%. Respondents were also more negative about the labor market, with just 15.4% expecting more jobs to be available, down from 16%, and nearly 28% anticipated fewer jobs, up from 26.2%.

Surprising Fact

The average U.S. household will spend an additional $740 this year on gas because of rising oil prices, economists from the Stanford Institute for Economic Policy Research said. The average price for a gallon of gas in the U.S. rose above $4 on Tuesday, eclipsing the threshold for the first time since 2022, according to AAA.

Crucial Quote

“The price of gasoline has become very much a barometer or pulse of how Americans are feeling about the broader U.S. economy,” Patrick De Haan, GasBuddy’s head of petroleum analysis, told Forbes. De Haan said when gas prices reach levels that Americans haven’t seen in “quite some time, it becomes uncomfortable in a way that’s oppressive, because Americans are very much tied to their cars.” Gas prices averaging $4 will likely be a “drag” on the U.S. economy, he said, “because consumers aren’t going to be feeling as good” as they have less money to spend.

Key Background

The University of Michigan’s earlier consumer sentiment survey pointed to a further rise in economic pessimism as more Americans expressed concerns about surging oil and gas prices. That survey fell below expectations in March to its lowest reading since December, when consumer sentiment once again approached a historic low. Joanne Hsu, the survey’s director, said Americans with middle and higher incomes and stock wealth “buffeted by escalating gas prices and volatile financial markets” had expressed “particularly large drops in sentiment.” Hsu noted the “persistence of high prices continues to be the dominant factor for consumer views on the economy,” after the survey indicated Americans expect consumer prices to rise 3.8% over the next year, up from 3.4% in February.