U.S. consumer confidence managed a slight increase in March, defying the pressure exerted by rapidly escalating energy costs linked to the conflict in Iran. This resilience in the topline reading contrasts with growing unease reflected in other key survey metrics.

Consumer Confidence Index Movement

Overall Sentiment Rises Slightly

The Conference Board reported on Tuesday that its consumer confidence index edged up to 91.8 in March. This marks a modest gain from the 91.0 reading recorded in February.

Inflationary Concerns Mount

While the overall confidence score remained stable, rising costs stemming from tariffs and spiking oil prices due to the Middle East conflict were noted. Specifically, respondents expressed increasing pessimism regarding future inflation expectations.

Comments referencing oil, gas, and the ongoing war spiked significantly. Consumers’ 12-month inflation expectations jumped to levels not seen since August 2025, a period when tariff-related anxiety was at its peak.

Impact of Soaring Energy Costs

Gas Prices Cross Key Threshold

U.S. gasoline prices surpassed an average of $4 per gallon on Tuesday, marking the first time this benchmark was breached since 2022. This surge is attributed to the war causing worldwide fuel price increases.

According to AAA, the national average for regular gasoline now stands at $4.02 per gallon. This represents an increase of more than a dollar since the conflict began.

Short-Term Expectations Decline

Measures tracking Americans’ short-term outlooks for income, business conditions, and the job market showed a decline. This composite measure fell 1.7 points to 70.9, remaining below the 80 threshold often associated with recessionary warnings.

This is the 14th consecutive month that this specific short-term expectations index has remained under the 80 mark.

Current Conditions vs. Future Outlook

Assessment of Current Situation Improves

In contrast to future expectations, consumers’ evaluations of their present economic situation saw improvement. The index measuring current economic assessments climbed by 4.6 points, reaching 123.3.

Inflation Data and Federal Reserve Implications

Recent government data from early March indicated that the inflation gauge closely monitored by the Federal Reserve increased by 2.8% in January. Excluding volatile food and energy sectors, core prices rose to 3.1%, up from 3.0% the previous month.

This core price increase is the highest recorded in nearly two years. These persistent higher prices, coupled with the prospect of further inflation due to the Iran war, suggest the Federal Reserve is unlikely to implement interest rate cuts soon.