U.S. consumer sentiment climbed in March by more than initially reported as views grew rosier about current economic conditions.
The University of Michigan's final sentiment index climbed to 98.4 from the prior month’s 93.8, according to a report Friday. The median estimate of economists surveyed by Bloomberg was 97.8, the same as the preliminary reading released earlier this month. The gauge of current conditions was higher than the initial reading, while the expectations gauge was lower. Five years ago in March 2014, the index was at 80.0.
- Plentiful jobs, rising wages and the Federal Reserve's reticence toward raising interest rates are proving beneficial to consumer attitudes. The gain in consumer sentiment was concentrated in the bottom two-thirds of the income distribution, with the share citing improved finances at a record for this group.
- The report contrasts with other recent data on consumer sentiment. The Conference Board's gauge showed a decline this month, while the weekly Bloomberg Consumer Comfort Index has fallen to a five-week low.
- Consumers anticipate slower gains in prices. Inflation expectations for the year ahead fell to 2.5 percent, the lowest reading since late 2017. The inflation rate over the next five to 10 years was also 2.5 percent, up from February. Fed policy makers closely monitor this part of the survey.
- An index of buying conditions for household durable goods eased to 156 from the previous month, while the data suggest “slightly lower unit sales” of houses and vehicles in the coming year, according to the report.
- Interviews were conducted Feb. 27 to March 25, while the cutoff for the preliminary report was March 13.
© Copyright 2023 Bloomberg News. All rights reserved.