Consumers are not feeling great at the moment, and they’re feeling even worse about the future.
That’s according to the latest Consumer Confidence Index published Tuesday by The Conference Board, a nonprofit business researcher.
Consumers’ feelings on the current state of the economy fell 3.6 points, to 134.5. But their outlook on conditions six months from now plunged 9.6 points, to 65.2.
That was the lowest level in 12 years and far below the threshold of 80 that usually signals a recession is coming, according to The Conference Board.
Overall, the consumer confidence index fell by 7.2 points in March to 92.9, its lowest mark since 2022 and below the neutral benchmark of 100. It has now declined in four consecutive months.
The findings are a worrying sign for restaurants, which began the year with a sense of cautious optimism that consumers would rebound after a tough 2024 marked by inflation and a contentious election cycle.
However, a slew of issues have combined to weigh on consumers in the first few months of 2025. Political issues such as tariffs and mass federal layoffs have created economic uncertainty. Meanwhile, inflation has continued to creep up, with egg prices in particular going through the roof due to an outbreak of avian flu.
These issues came up again and again in consumers’ written responses, the Conference Board said.
The researcher also found that consumers are becoming more pessimistic about their earnings prospects. More than 15% said they expect their income to decrease six months from now, up from 12.8% in last month’s survey.
“Consumers’ optimism about future income—which had held up quite strongly in the past few months—largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations,” said Stephanie Guichard, senior economist, global indicators at The Conference Board, in a statement.
The results mirror those of a similar monthly survey conducted by the University of Michigan, which highlighted how things like tariffs may be impacting consumers’ outlook.
“Frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences,” wrote Joanne Hsu, director of consumer surveys for the university.
That has led some to put off large purchases like homes and cars, according to The Conference Board, though more said they planned to buy appliances and electronics, possibly to get ahead of price hikes caused by tariffs.
Demand for services held steady, though it shifted away from movies, live entertainment and sports toward outdoor activities and travel.
The results did not mention restaurants specifically, but lower incomes would obviously mean people have less money to spend on dining out.
The overall decline in confidence was driven by consumers older than 55 and to a lesser extent those between 35 and 55. Confidence rose slightly among people younger than 35, which is a key audience for restaurants.
In terms of income groups, every bracket was feeling worse except households earning more than $125,000 a year.
The survey measures sentiment, which does not always reflect how consumers actually behave, especially six months from now. And there has been some evidence to suggest that people are still willing to spend at restaurants.
Last week, Olive Garden parent Darden Restaurants reported that same-store sales were positive in March, surprising analysts who were bracing for bad news. Olive Garden is the largest casual-dining chain in the U.S. and a key indicator of dining demand.
“Changes in consumer sentiment haven't necessarily translated to material changes in consumer spending,” said Darden CEO Rick Cardenas during an earnings call. “So I think as long as incomes are going up and outpacing inflation, I think they're likely to keep spending.”
The labor market is another key driver of restaurant sales, and though it has been uneven over the past few months, employers have continued to add jobs month over month.
“If consumers have a job, they will likely spend money,” the National Restaurant Association wrote in a research note published Tuesday. “Based on the expectations of continued job growth, households on the aggregate are expected to remain in a positive financial position.”
The association also noted that consumers still want to go out to eat if they can afford it. In January, 48% of adults said they weren’t going to restaurants as often as they’d like, up from 42% in September and the highest mark since March 2022.
That’s a sign that there is pent-up demand. “Consumers will likely continue to visit restaurants in the coming months – as long as they have the financial wherewithal to do so,” the association wrote.
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