- Consumer sentiment preliminary for March 55.5 vs 55.0 estimate. Weakest cents December of last year.
- prior month 56.6.
- Current conditions 57.8 vs 56.6 prior month
- Expectations 54.1 vs 56.6 prior month. Weakest since November of last year.
- 1 year inflation expectations 3.4% vs 3.4% prior month
- 5 year inflation expectations 3.2% vs 3.3% prior month
Surveys of Consumers Director Joanne Hsu
Consumer sentiment dipped about 2%, reaching its lowest reading of the year. Interviews completed prior to the military action in Iran showed an improvement in sentiment from last month, but lower readings seen during the nine days thereafter completely erased those initial gains. Gasoline prices have exerted the most immediate impact felt by consumers, though the magnitude of passthrough to other prices remains highly uncertain. A broad swath of consumers across incomes, age, and political affiliation all reported declines in expectations for their personal finances, down 7.5% nationally. Interviews for this release were collected between February 17 and March 9, with about half completed after the start of the US military conflict in Iran.
This month, year-ahead inflation expectations ended six months of consecutive declines, stalling at 3.4%. The current reading exceeds those seen in 2024 and remains well above the 2.3–3.0% range seen in the two years pre-pandemic. Long-run inflation expectations inched down to 3.2%. In 2024, readings ranged between 2.8% and 3.2%, while in 2019 and 2020, they were consistently below 2.8%. Note that for both time horizons, interviews completed after February 28th exhibited higher inflation expectations than those completed before that date.
What it is?
Published monthly by the University of Michigan’s Institute for Social Research, the index is based on a survey of approximately 600 households. It is a widely watched leading indicator of U.S. consumer spending, as higher confidence typically correlates with increased economic activity
