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Published : 01 Apr 2026, 10:34 AM
US consumer confidence unexpectedly edged up in March, but households remained downbeat on the labour market and anticipated higher inflation over the next 12 months amid a surge in gasoline prices and continued tariff pass-through.
That labour market apprehension was underscored by the other data on Tuesday showing fewer job openings in February and hiring tumbling to a six-year low. Economists say lingering uncertainty caused by President Donald Trump's trade and immigration policies has undercut demand for and supply of workers, hampering the labour market.
They saw a downside risk from the month-long US-Israeli war with Iran, which has sent global oil prices surging more than 50%, and the national average retail gasoline price topping $4 a gallon for the first time in more than three years.
"This is not a good omen for the health and vitality of the labor market," said Christopher Rupkey, chief economist at FWDBONDS. "Companies have grown more cautious as the price of gasoline has risen over a dollar a gallon since the war began, and consumers have become much less confident."
The Conference Board said its consumer confidence index increased 0.8 point to 91.8 this month. Economists polled by Reuters had forecast the index at 88.0.
Despite the rise in the index, increasing cost pressures because of tariffs and spiking oil prices were evident in the survey. Consumers' median 12-month inflation expectations jumped to 5.2%, the highest since May 2025, from 4.5% in February.
"Comments about prices and the cost of goods suggest that the cost of living remained at the top of consumers' minds," said Dana Peterson, chief economist at the Conference Board.
Though confidence by political affiliation was little changed, consumers identifying as Republicans remained the most optimistic relative to Independents and Democrats. While there was an uptick in the share of consumers saying jobs were "plentiful," the proportion perceiving employment as "hard to get" was the highest since February 2021. The survey's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, rose to 5.8% from 5.7% in February. This measure, which correlates to the unemployment rate in the Labor Department's monthly employment report, was around 18.2% a year ago.
A bounce-back rally on Tuesday sent US stocks soaring, with the Dow gaining 2.5%, the S&P 500 climbing nearly 3% and the Nasdaq rising more than 3.8%.
The unemployment rate rose to 4.4% in February from 4.3% in January. Though economists expect the jobless rate to have been unchanged in March, they acknowledged the risk of it rising to 4.5%. Opportunities remain scarce for young adults. The Labour Department will release its March payrolls report on Friday.
Job openings, a measure of labor demand, decreased 358,000 to 6.882 million by thelast day of February, the Labour Department's Bureau of Labor Statistics said in its Job Openings and Labour Turnover Survey, or JOLTS report. Economists had forecast 6.918 million unfilled jobs.
The accommodation and food services sector had 211,000 fewer job openings, while unfilled positions dropped 71,000 in the manufacturing sector.
Ironically, Trump has defended his sweeping tariffs as necessary to revive the nation's industrial base. The import duties, which Trump pursued under a law meant for use in national emergencies, were struck down by the US Supreme Court. Trump, however, swiftly imposed a 10% global tariff and later raised it to 15%.
There were fewer vacancies in the construction, financial activities, wholesale trade sectors as well as in state and local government. The decline in job openings was concentrated among businesses with one to nine employees and those with 50 to 249 employees.
The job openings rate dropped to 4.2% from 4.4% in January.
Hiring decreased by 498,000 positions to 4.849 million last month, the lowest level since March 2020 at the start of the COVID-19 pandemic. Outside the pandemic, hiring was the lowest since August 2014, with a 178,000 plunge in the accommodation and food services sector.
There were sharp decreases in the healthcare and social assistance, professional and business services, and construction industries. The declines aligned with the decrease in nonfarm payrolls in February.
The hires rate dropped to 3.1% from 3.4% in January. Layoffs and discharges increased 61,000 to a still-low 1.721 million, with the rate rising to 1.1% from 1.0% in the prior month.
Federal Reserve Chair Jerome Powell this month described the labor market as being in a "zero-employment growth equilibrium" that has "a feel of downside risk." Some economists viewed the JOLTS report as signaling that downside risk. Rising inflation expectations and a softening labor market could put the US central bank in a difficult position.
The Fed left its benchmark overnight interest rate in the 3.50%-3.75% range this month. In updated projections released alongside the decision, policymakers anticipated higher inflation and only a single reduction in borrowing costs this year. Some economists, however, see the window for rate cuts closing.
"The 'four horsemen' - hiring, layoffs, job openings and unemployment rates - suggest deterioration even before the oil shock," said Michael Gapen, chief economist at Morgan Stanley.
Stocks on Wall Street were trading higher on hopes for de-escalation in the Middle East conflict, though the S&P 500 index and Dow Jones Industrial Average were on track for their biggest monthly decline in years. The dollar slipped against a basket of currencies. US Treasury yields fell.
While the correlation between consumer confidence and spending is weak, rising gasoline prices and falling share values, combined with a softening labor market, could undercut consumption and curb economic growth. Higher-income households have led consumer spending, underpinned by robust wealth levels.
The Conference Board survey showed plans to buy big-ticket items over the next six months shifted to "no" in March from "yes" and "maybe" in February. Still, the share saying "yes" remained well above the other responses, the survey showed, with used cars, furniture, televisions and smartphones remaining the most popular items for future purchases.
"We see the oil price move as being demand destructive in that it reduces spending power for discretionary items," said James Knightley, chief international economist at ING.
