The University of Michigan's gauge of consumer sentiment fell in March to the lowest level since November 2022, led by a slump in expectations over the "potential for pain" from US economic policies introduced by the new administration.
Sentiment fell to 57, down from 64.7 in February and 79.4 in March 2024, according to the University of Michigan's consumer sentiment survey released Friday. The final reading for March was lower than the preliminary reading. The sentiment index fell to a record low of 50 in June 2022 on inflation concerns.
The index of consumer expectations fell to 52.6, the lowest since July 2022, from 64 in February and 77.4 in March last year. The expectations index has lost more than 30pc since November last year.
"Consumers continue to worry about the potential for pain amid ongoing economic policy developments," the survey director Joanne Hsu said.
The decline "reflects a clear consensus across all demographic and political affiliations: Republicans joined independents and Democrats in expressing worsening expectations … for their personal finances, business conditions, unemployment and inflation," Hsu said.
Current economic conditions slipped to 63.8 in March from 65.7 in February and 82.5 last March.
Two thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009. Year-ahead inflation expectations jumped to 5pc this month, the highest reading since November 2022, from 4.3pc last month.
The University of Michigan survey comes three days after The Conference Board's preliminary Consumer Expectations Index fell in March to its lowest in 12 years, to below a threshold that "usually signals" a recession.
