American consumer confidence drops to a three-month low, while inflation expectations reach the largest increase in nearly a year.

Against the backdrop of escalating energy prices due to ongoing conflicts in the Middle East, consumer confidence in the United States has weakened significantly, while inflation expectations have risen again. The latest data shows that in March, the US consumer confidence index dropped to a three-month low, reflecting the impact of high oil prices and economic uncertainty on residents' emotions. According to data released by the University of Michigan, the final consumer confidence index for March was 53.3, lower than the preliminary value of 55.5. The survey covered the period from February 17 to March 23, with approximately two-thirds of the surveyed data collected after the outbreak of the conflict in Iran. In terms of inflation expectations, consumers expect a 3.8% price increase in the next year, a significant increase from the previous month's 3.4%, marking the largest increase since April 2025. However, long-term inflation expectations have declined somewhat. Rising energy prices are an important driver of the current uptick in inflation expectations. Since the US military action against Iran, US gasoline prices have increased by about $1 per gallon on average, and the related conflict is about to enter its fifth week. Analysts point out that this impact, combined with the pressure of rising cost of living previously, may force consumers to cut discretionary spending. Media surveys show that economists have raised their forecasts for inflation for the year, while lowering their expectations for economic growth, consumption, and employment. Joanne Hsu, the head of the survey, stated that high prices continue to be the dominant factor affecting consumers' economic outlook, with 47% of respondents mentioning that price increases are eroding their personal financial situation. She also pointed out that expectations for gasoline prices in the next year have risen to the highest level since June 2022, which was during the peak of inflation caused by the Russia-Ukraine conflict. Looking at different groups, the decline in consumer confidence is particularly pronounced among the middle- to high-income group and among consumers who hold stock assets. Hsu stated that these groups are facing a double blow from soaring oil prices and financial market volatility, leading to a more significant decline in sentiment. Specific indicators show that the index reflecting the current economic situation dropped from 56.6 in February to 55.8, while the expectation index dropped to a four-month low. In addition, consumers' expectations of their future financial situation have also dropped to the lowest level in five months.