Consumer sentiment falls in March

Consumer Sentiment was 63.4 in February, according to the University of Michigan Consumer Sentiment Index. February’s figure was 3.6 points below February reading and is 4.0 points above the March 2022 index. The Current Economic Conditions Index fell 4.3 points from the previous month to 66.4 and is 0.8 points below the March 2022 index. The Consumer Expectations Index decreased by 3.2 points to 61.5 and is 7.2 points higher from a year ago.

“Consumer sentiment fell for the first time in four months, sitting about 5% below February but remaining 7% above a year ago. This month’s decrease was already fully realized prior to the failure of Silicon Valley Bank, at which time about 85% of our interviews for this preliminary release had been completed. Sentiment declines were concentrated among lower-income, less-educated, and younger consumers, as well as consumers with the top tercile of stock holdings. Overall, all components of the index worsened relatively evenly, primarily on the basis of persistently high prices, creating downward momentum for sentiment leading into the financial turmoil that began last week”.

“Year-ahead inflation expectations receded from 4.1% in February to 3.8%, the lowest reading since April 2021, but remain well above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations edged down to 2.8%, falling below the narrow 2.9-3.1% range for only the second time in the last 20 months. Long-run inflation expectations remain elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic. With ongoing turbulence in the financial sector and uncertainty over the Fed’s possible policy response, inflation expectations are likely to be volatile in the months ahead”. Said Surveys of Consumers Director Joanne Hsu.

Read the University of Michigan Surveys of Consumers release.