Yesterday, we discussed how the fourth-quarter GDP numbers got revised upward based in large part on much stronger consumer spending than had been initially estimated. So it's all the more surprising that consumer confidence fell off in March to its lowest level since November 2009.
The answer for the decline is simple: gas prices. Consumer confidence is directly correlated to the price of gasoline, for obvious reasons; people start to freak out a little when they're faced with the prospect of paying five dollars for a gallon of gas.
Inflation is starting to be a real concern for people. The consumer confidence survey showed that people expect inflation to average 4.6 percent over the next year. The Fed does a similar survey with a broader outlook, asking Americans where they expect inflation to be over the next five years. The response to that was 3.2 percent - the highest this survey has shown since August 2008.
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