A report from
the University of Michigan revealed on Friday that the preliminary reading for
the Reuters/Michigan index of consumer sentiment dropped 10.5 per cent m-o-m to
57.9 in early March. This marked the lowest reading since November 2022 (56.8).
Economists had anticipated
the indicator would decrease to 63.1
this month from the February
final reading of 64.7.
According to
the report, the index of current economic conditions fell 3.3 per cent m-o-m to 63.5 in March (the lowest level in six
months), while the index of consumer expectations plunged 15.3 per cent m-o-m
to 54.2 (the lowest level since July 2022 (47.3)).
The report also
revealed that the estimates of year-ahead expected inflation jumped from 4.3
per cent in February to 4.9 per
cent early this month, the highest level since November 2022 (4.9 per cent). At the same time, the 5-year expected inflation climbed
from 3.5 per cent to 3.9
per cent., recording its largest m-o-m increase since 1993.
Commenting on
the latest survey, Surveys of Consumers
Director Joanne Hsu noted that consumer sentiment has now fallen for three
consecutive months and is currently down 22% from December 2024. “Many
consumers cited the high level of uncertainty around policy and other economic
factors; frequent gyrations in economic policies make it very difficult for
consumers to plan for the future, regardless of one’s policy preferences,” she noted.