Final results show consumer sentiment fell 7.7 points in March to 57, down 22.4 points from one year ago, according to final results of the University of Michigan Surveys of Consumers. The Current Economic Conditions Index edged down 1.9 points from the previous month to 63.8, 18.7 points lower than year-ago-levels. The Consumer Expectations Index fell 11.4 points to 52.6, 24.8 points lower than the March 2024 Index.
“Consumer sentiment confirmed its early month reading and fell for the third straight month, plummeting 12% from February. The expectations index plunged a precipitous 18% and has now lost more than 30% since November 2024. This month’s decline reflects a clear consensus across all demographic and political affiliations; Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment, and inflation. Consumers continue to worry about the potential for pain amid ongoing economic policy developments. Notably, two-thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009. This trend reveals a key vulnerability for consumers, given that strong labor markets and incomes have been the primary source of strength supporting consumer spending in recent years. said University of Michigan Surveys of Consumers Director Joanne Hsu.
Year-ahead inflation expectations jumped up from 4.3% last month to 5.0% this month, the highest reading since November 2022 and marking three consecutive months of unusually large increases of 0.5 percentage points or more. This month’s rise was seen across all three political affiliations. Long-run inflation expectations surged from 3.5% in February to 4.1% in March, reflecting from a large surge among independents plus a sizable rise among Republicans. Here, as is the case for other measures from the Surveys of Consumers, aggregate trends are driven by and align closely with the views of independents, and thus are not being swung by polarization across the two major parties.
Read the University of Michigan Surveys of Consumers release.
