The Conference Board’s findings come after Washington policymakers allowed the $85 billion in automatic spending cuts known as sequestration to go into effect in early March, and as Democrats and Republicans continue to push for different fixes to the country’s fiscal issues.
Analysts had expected the consumer confidence number to only inch downward, with economists surveyed by news outlets projecting the index to come in around 67.
As Franco noted, The Conference Board’s expectations index suffered the biggest decline in March, dropping almost 12 points to 60.9. The index for present conditions decreased from 61.4 to 57.9.
Ian Shepherdson of Pantheon Macroeconomic Advisors said that the decline in both indexes likely meant that consumers were dealing with a shock to the economy – in this case, the sequester, the end of the payroll tax cut early this year and a February rise in gas prices.