Keeping you up to date on the latest data releases.
Preliminary numbers show that The University of Michigan’s Index of Consumer Sentiment dropped to 71.8 in early March from a slightly upwardly revised 77.6 in February. This release was peppered with trend-bending results. For starters, the fewest consumers in decades anticipated that their finances would improve during the year ahead, as evidenced by an 11-point drop in the index’s Expected Personal Finances component. Also, unlike the more favorable employment prospects that consumers held over the past year, they now expect net increases in the national unemployment rate. This is reflected in the drop in the Economic Outlook component from 87 to 70. In addition, just 20 percent of surveyed consumers expected their financial situation to improve during the year ahead. This was the lowest figure ever recorded, matching the lows first recorded in 1979 and 1980. When asked about the outlook for their finances over the next five years, just 33 percent of all consumers expected to be better off, the lowest level ever recorded. Finally, a new all-time record number of consumers made unfavorable references to government economic policies when they were asked to describe in their own words what economic news they had recently heard. In early March, 34 percent made unfavorable references to government economic policies, up from the prior record of 31 percent in January.
As for inflation expectations, consumers in early March expected a year-ahead inflation rate of 3.3 percent and a longer-term (5- to 10-year) rate of 2.9 percent.