WASHINGTON, March 31 (Reuters) – U.S. consumer confidence rose unexpectedly in March, but households remained depressed in the labor market and expected a sharp rise in prices over the next 12 months amid rising gasoline prices and higher tariffs.
Those fears about the labor market were underscored by other data on Tuesday showing fewer jobs in February and hiring falling to a six-year low. Economists say the lingering uncertainty caused by President Donald Trump’s trade and immigration policies has reduced the demand for and supply of workers, disrupting the labor market.
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“This is not a good sign for the health and strength of the labor market,” said Christopher Rupkey, chief economist at FWDBONDS. “Companies have become more cautious as the price of gasoline has risen by more than one dollar since the start of the war, and consumers are less confident.”
The Conference Board said its consumer confidence index increased 0.8 points to 91.8 this month. Economists polled by Reuters had predicted the index at 88.0.
Despite the rise in the list, increasing cost pressures due to tariffs and spiking oil prices were evident in the survey. Average consumer expectations for 12-month inflation rose to 5.2%, the highest figure since May 2025, from 4.5% in February.
“Comments on prices and the cost of goods suggest that the cost of living remained at the top of consumers’ minds,” said Dana Peterson, chief economist at the Conference Board.
Although trust in political affiliation was little changed, consumers who identify as Republicans remained the most trusting of independents and Democrats. Although there was an increase in the percentage of consumers who said there were “a lot of jobs,” the percentage that considered work “hard to find” was the highest since February 2021. The so-called difference in the labor market, derived from data on respondents’ opinions about whether jobs are plentiful or difficult to find, rose to 5.7% in February. This measure, which is consistent with the unemployment rate in the monthly employment report of the Department of Labor, was about 18.2% last year.
The unemployment rate rose to 4.4% in February from 4.3% in January. Although economists expected the unemployment rate to be unchanged in March, they accepted the risk of it rising to 4.5%. Opportunities are still lacking for young adults. The Labor Department will release its March earnings report on Friday.
Job openings, a measure of labor demand, decreased by 358,000 to 6.882 million on the last day of February, the Bureau of Labor Statistics of the Department of Labor said in its Job Openings and Labor Turnover Survey, or JOLTS report. Economists had predicted 6.918 million unfilled jobs.
The accommodation and food services sector had fewer jobs by 211,000, while vacancies fell by 71,000 in the manufacturing sector.
Ironically, Trump has defended his sweeping tariffs as necessary to revitalize the nation’s industrial base. The foreign jobs, which Trump had pursued under a law meant to be used in national emergencies, were struck down by the US Supreme Court. However, Trump quickly set global tariffs at 10% and later raised them to 15%.
There were few vacancies in construction, financial services, large business sectors as well as national and local government. The decline in employment opportunities was concentrated among businesses with one to nine employees and those with 50 to 249 employees.
The unemployment rate fell to 4.2% from 4.4% in January.
Hiring fell by 498,000 positions to 4.849 million last month, the lowest level since March 2020 at the start of the COVID-19 pandemic. Outside of the pandemic, hiring was the lowest since August 2014, with a loss of 178,000 in the accommodation and food services sector.
There were sharp declines in health care and social assistance, professional and business services, and the construction industry. The decline coincided with a decline in non-farm payrolls in February.
The hiring rate fell to 3.1% from 3.4% in January. Layoffs and layoffs increased by 61,000 to a still-low 1.721 million, with the rate rising to 1.1% from 1.0% last month.
Federal Reserve Chairman Jerome Powell this month described the labor market as “the pace of job growth” with “low risk sentiment.” Some economists viewed the JOLTS report as a sign that the risk is waning. Rising inflation expectations and a tightening labor market could put the US central bank in a difficult position.
“The ‘four horsemen’ – hiring, firing, job openings and the unemployment rate – suggest a downturn even before the oil shock,” said Michael Gapen, chief economist at Morgan Stanley.
Wall Street stocks were trading higher on hopes of an easing of tensions in the Middle East, even as the S&P 500 index and the Dow Jones Industrial Average were on pace for their biggest monthly declines in years. The dollar slipped against a basket of currencies. US Treasury yields fell.
Although the relationship between consumer confidence and spending is weak, rising oil prices and falling stock prices, combined with a weak labor market, can reduce consumption and inhibit economic growth. High-income households have driven consumer spending, supported by strong economic conditions.
The Conference Board survey showed plans to buy big-ticket items in the next six months changed to “no” in March from “yes” and “maybe” in February. However, the “yes” segment remained on top of other responses, the survey showed, with used cars, furniture, televisions and smartphones remaining the most popular items for future purchases.
James Knightley, ING’s chief economist, said: “We see the price of oil as having a negative effect on demand because it reduces energy consumption for specific items.
Reporting by Lucia Mutikani; Edited by Chizu Nomiyama and Andrea Ricci
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