Consumer sentiment in the US held steady in early March, with most expecting inflation to ease, according to preliminary results from the University of Michigan Survey of Consumers released today.
The index of consumer sentiment edged down 0.4 index point a reading of 76.5 in March from 76.9 in February. The decrease is well within the margin of error and shows sentiment has been steady and essentially unchanged since January.
“Sentiment remained almost 25% above November 2023 and is currently halfway between the historic low reached during the peak of inflation in June 2022 and pre-pandemic readings,” Surveys of Consumers Director Joanne Hsu said in a press release. “Small improvements in personal finances were offset by modest declines in expectations for business conditions.”
After strong gains between November 2023 and January 2024, consumer views have stabilized into a holding pattern, Hsu noted. Consumers perceived few signals that the economy is currently improving or deteriorating.
“Indeed, many are withholding judgment about the trajectory of the economy, particularly in the long term, pending the results of this November’s election,” Hsu said.
The report found Americans’ outlook for inflation hasn’t changed this month compared with February, The Associated Press reported. Consumers expect inflation over the next year to be 3%, the same as in the previous month. And over the next five to 10 years, they expect inflation to be 2.9%, also unchanged from February. While those figures exceed the Fed’s inflation target, they’re only slightly higher than the pre-pandemic averages.
The sub-index for consumer expectations edged down to 74.6 in March from 75.2 in February, below the expected reading of 75.1. The sub-index for current conditions held flat at 79.4 in March, slightly above the expected 79.2.