US consumer confidence edges up despite $4 gas prices; inflation worries rise amid Iran war – The Times of India

US consumer confidence rose marginally in March even as fuel prices surged due to the Iran war, highlighting resilience in spending but growing concerns around inflation and economic outlook, according to AP.The Conference Board said its consumer confidence index increased to 91.8 in March from 91 in February, indicating a modest improvement despite rising cost pressures.While the headline number remained stable, underlying indicators pointed to rising anxiety among consumers. The survey noted increasing pessimism, particularly around inflation expectations, as oil and gas prices climbed sharply amid the Middle East conflict.Mentions of oil, gas and the war rose significantly in respondents’ feedback, while 12-month inflation expectations jumped to levels last seen in August 2025, when concerns over tariffs had peaked.US gasoline prices crossed $4 per gallon for the first time since 2022, with the national average reaching $4.02, according to AAA. Prices have risen by over $1 since the conflict began.“This is the key concern as the war in Iran enters the second month – will the oil price shock turn into a demand destruction shock?” said Heather Long, chief economist at Navy Federal Credit Union.She noted that consumer spending remained steady in March, based on credit card data, but warned that pressures could intensify in the coming months “as the worst of the inflation shock hits consumers.”A key gauge of short-term expectations for income, business conditions and employment declined by 1.7 points to 70.9 — the 14th straight month below 80, a level often associated with recession risks.In contrast, the index measuring current economic conditions rose 4.6 points to 123.3.Inflation remains elevated. Government data showed a key inflation gauge rose 2.8% in January, even before the recent surge in energy prices. Core inflation, excluding food and energy, increased to 3.1%, the highest in nearly two years.Elevated prices and the likelihood of further inflation due to the Iran war have reduced expectations of near-term rate cuts by the Federal Reserve.The Fed had cut rates three times in 2025 to support the labour market but has paused further action in recent meetings amid persistent inflation above its 2% target.Labour market signals remain mixed. While views on current employment conditions improved slightly, expectations for the next six months weakened.Data from the Labour Department showed US employers cut 92,000 jobs in February, contrary to expectations of job gains, while the unemployment rate rose to 4.4%.Another report showed job openings declined to 6.9 million in February from 7.2 million in January.Economists describe the current labour market as “low hire, low fire”, with businesses cautious on hiring amid uncertainty over tariffs and high interest rates.Economic growth also slowed to 1.4% in the final quarter of last year, weighed down by a government shutdown and softer consumer spending.Survey data showed demand trends remain uneven. Plans to purchase cars increased in March, particularly for used vehicles, while homebuying expectations declined amid a prolonged housing slowdown.Expectations for stock market gains over the next year also dropped sharply, reflecting growing uncertainty among consumers.