Consumer Sentiment Declined 7.5% to 62 in March

Ann Arbor, MI, March 31, 2023-Consumer sentiment declined 7.5% to 62.0 in March, according to final results from the University of Michigan Survey of Consumers.

This represents a 4.4% increase year over year.

“Consumer sentiment fell for the first time in four months, dropping about 8% below February but remaining 4% above a year ago,” according to Survey of Consumer director Joanne Hsu. “This month’s turmoil in the banking sector had limited impact on consumer sentiment, which was already exhibiting downward momentum prior to the collapse of Silicon Valley Bank. Overall, our data revealed multiple signs that consumers increasingly expect a recession ahead. While sentiment fell across all demographic groups, the declines were sharpest for lower-income, less-educated, and younger consumers, as well as consumers with the top tercile of stock holdings. All five index components declined this month, led by a notably sharp weakening in one-year business conditions. 

“Year-ahead inflation expectations receded from 4.1% in February to 3.6%, the lowest reading since April 2021, but remained well above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations came in at 2.9% for the fourth consecutive month and stayed within the narrow 2.9-3.1% range for 19 of the last 20 months.”