Yes, politics are an influence here (the world is upside down as Dems hate tariffs/taxes but Repubs are fine with them) but a very stagflationary outlook/mood

The very politically divided initial March UoM consumer confidence index fell to 57.9 from 64.7 and that was below the estimate of 63 and the weakest since November 2022. Most of the drop came from the Expectations component which declined by 10 pts m/o/m. The Current Conditions index was lower by a more modest 2.2 pts m/o/m. Also of note, one year inflation expectations jumped to 4.9% from 4.3% and that is the highest since November 2022. The UoM specifically said “This month’s rise was seen across all three political affiliations.” The 5-10 yr crystal ball guess went to 3.9% from 3.5%, a level last seen in early 1993.

It’s not just worries about inflation but growing concerns with the labor market. The employment component plummeted by 20 pts to just 50 with those seeing ‘more unemployment’ rising by 15 pts to 66, the most since February 2009 at the depths of the Great Recession. The income component went negative with more respondents now expecting lower income compared to those seeing more.

The percentage of those expecting that family income will exceed inflation over the coming 5 years fell to just 25.5%, the lowest since this question was first asked in 1997.

Spending intentions were mixed with the drop in mortgage rates likely helping to lift by 2 pts those that think it’s a Good Time to Buy a House but after dropping by 6 pts last month. Intentions to buy a major appliance also rose by 4 pts but declined by 20 pts in February. Vehicle intentions sunk again, by 7 pts to the lowest level since November 2022.

One’s politics continues to be a major influence on the data as sentiment dropped the most for Democrats, down about 10 pts m/o/m at 41.4. For perspective, it’s now down 50 pts since pre-election. In contrast, the mood among Republican consumers at 83.9 (down 2.8 pts m/o/m) compares with 53.6 in October 2024. It’s worth pointing out though that the Expectations component among Republicans fell by 11 pts m/o/m. Confidence among Independents dropped by 5.4 pts m/o/m to 57.2 which compares with 65.8 in October.

Overall, the UoM said the confidence declines were “seen consistently across all groups by age, education, income, wealth, political affiliations, and geographic regions.”