U.S. consumer confidence declines in March due to economic impact of Iran war

Investing.com - A survey released by the University of Michigan on Friday shows that U.S. consumer confidence has fallen to its lowest level since December, but American households do not seem to expect the impact of the Iran war on inflation and growth to persist in the long term.

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The final reading of the confidence index for March dropped from 56.6 in February to 53.3. While this is the lowest level so far this year, it remains above the lows reached last year when consumers were grappling with the uncertainty brought by President Trump’s comprehensive tariff policies.

Consumers with middle to high incomes and stock wealth, despite being viewed by some economists as the driving force of the overall economy, have been particularly hit by soaring gas prices and financial market volatility following the joint U.S. and Israeli attacks on Iran in late February. Joanne Hsu, director of the University of Michigan Consumer Survey, stated in a release that this group “has seen a particularly significant decline in confidence.”

Hsu noted that, overall, short-term economic outlook and personal financial expectations for the coming year have declined sharply, but the drop in long-term expectations is “more moderate.”

Hsu added, “These patterns suggest that consumers may not currently believe that the recent negative developments will persist into the distant future. However, if the Iran conflict becomes protracted or energy prices feed into overall inflation, these views could change.”

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