According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, the NFIB Small Business Optimism Index fell 3.3 points in March to 97.4, falling below the 51-year average of 98. March’s drop reflected the largest monthly decline since June 2022. Of the 10 components included in the index, only two increased, seven decreased and one stayed the same.   

Consumer sentiment fell for the fourth consecutive month, dropping 10.9% from 57.0 to 50.8, with sentiment falling more than 30% since December 2024. Like last month’s reading, declines in sentiment were observed across political, age and wealth groups. Meanwhile, current economic conditions plunged 11.4%, and expectations for future conditions for personal finances, incomes, labor markets and inflation all declined.   

The share of consumers expecting unemployment to rise in the year ahead is now more than double the November 2024 reading and the highest since 2009, which lies in sharp contrast to the past several years, when robust spending was supported primarily by strong labor markets and incomes. Year-ahead inflation expectations rose from 5.0% to 6.7% this month, the highest reading since 1981. Long-run inflation expectations increased from 4.1% to 4.4% in April, well above the pre-pandemic range of 2.2%–2.6%.