US consumer confidence remains below pre-pandemic levels as households continue to limit discretionary spending and focus on essential purchases, according to the latest data from The Conference Board.
The findings are being closely watched across the global retail sector as brands assess demand trends ahead of the second half of 2026.
The Conference Board’s Consumer Confidence Index rose slightly to 91.8 in March from 91.0 in February, showing a modest improvement in sentiment. However, the Expectations Index, which tracks short-term views on income, jobs and business conditions, remained below the threshold often associated with recession risks.
Consumer spending continues to support the US economy, but shoppers are becoming more selective. Retailers, consumer brands and supply chain operators are responding by adjusting inventory, pricing and promotional strategies.
Spending moves towards essentials
The report showed that US consumers are still spending on restaurants, take-away food, beauty products and streaming services, while demand for more expensive discretionary goods remains under pressure.
Purchase plans for home furnishings, electronics and white goods improved slightly in March, although overall spending intentions weakened across many service categories.
The Conference Board said “consumer spending trends in 2026 remain focused on ‘cheap thrills’ and necessary services”.
Retail analysts say this pattern reflects ongoing concerns around inflation, housing costs and borrowing expenses. Consumers are increasingly prioritising lower-cost experiences and essential products over larger purchases.
Separate UK retail sales data published this week also pointed to weaker consumer demand. British retail sales fell by 1.3% in April, with fuel and clothing sales seeing the largest declines.
Labour market concerns grow
While consumers remain relatively positive about current labour market conditions, expectations for future employment weakened in March. According to the survey, 27.9% of consumers expected fewer jobs to become available over the next six months, compared with 26.2% in February.
The proportion of respondents expecting better business conditions increased slightly, but pessimism around income growth and inflation remained elevated.
The Expectations Index stayed below 80, a level economists often associate with increased recession risk if sustained for a long period.
For retailers, softer employment expectations can affect spending confidence, particularly in discretionary categories such as fashion, furniture and consumer electronics.
Retailers adjust forecasts
Large retailers and consumer goods companies are increasingly relying on discounting, loyalty schemes and value-focused product ranges to maintain sales volumes.
The Conference Board noted that consumers are showing stronger interest in used vehicles than new cars, while spending intentions for travel and leisure services have become more cautious.
Industry observers say retailers are also monitoring volatility in energy prices, geopolitical tensions and interest rates, all of which continue to shape household spending behaviour.
Although consumer confidence improved marginally in recent months, sentiment remains fragile compared with historical averages. The next Consumer Confidence Index release from The Conference Board is scheduled for 26 May 2026.
