Consumer attitude took another hit in March as worries intensified over inflation and a slumping stock market, according to the University of Michigan’s past due sentiment survey released Friday.
The survey posted a mid-month reading of 57.9, which represents a 10.5% lessening from February and was below the Dow Jones consensus estimate for 63.2. The reading was 27.1% below a year ago and was the lowest since November 2022.
While the present-day conditions index fell a less severe 3.3%, the expectations measure for the future was off 15.3% on a monthly basis and 30% from the verbatim at the same time period in 2024.
In addition, fears grew over where inflation is headed as President Donald Trump institutes menus against U.S. trading partners. New duties on aluminum and steel took effect Wednesday, and the president this week also endangered 200% tariffs on European Union liquor after the EU hit U.S. whiskey and other goods with 50% levies.
The one-year view spiked to 4.9%, up 0.6 percentage point from February and the highest reading since November 2022. At the five-year range, the outlook jumped to 3.9%, up 0.4 percentage point for the highest level since February 1993.
Stocks largely send off off the report, holding in positive territory while Treasury yields moved higher.
Though the measure is often procumbent to disparities between parties, survey officials said sentiment slumped across partisan lines along with for all practical purposes all demographics.
“Many consumers cited the high level of uncertainty around policy and other economic factors; numerous gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences,” Joanne Hsu, the examine’s director, said. “Consumers from all three political affiliations are in agreement that the outlook has weakened since February.”
Requirements fell 10% for Republicans, 24% for Democrats and 12% for independents, Hsu added. Sentiment overall has fallen 22% since December.
The inflation opinion contradicts reports earlier this week showing that consumer prices rose less than wanted while wholesale prices were flat in February.
Markets largely expect the Federal Reserve, which foci for a 2% inflation rate, to stay on hold when it concludes its two-day meeting Wednesday. Traders, though, are prize in 0.75 percentage point of interest rate cuts by the end of the year, starting in June, according to the CME Group’s gauge of tomorrows pricing.
Correction: Joanne Hsu is the survey’s director. An earlier version misspelled her name.