Consumer sentiment continues to take a serious tumble, with members of all political groups beginning to express worry and unease in their economic outlooks, according to the latest data from the University of Michigan.
The latest Index of Consumer Sentiment reading came in at 57 for March, falling a whopping 11.9% from February’s 64.7 reading. The Index is also now down 28.2% year-over-year.
The current economic conditions reading registered at 63.8, down only 2.9% from February but 22.7% YoY. The Index of Consumer Expectations came in at 52.6, down an astounding 17.8% from February and 32% YoY.
Surveys of Consumers Director Joanne Hsu stated that March’s data reflected a “clear consensus across all demographic and political affiliations,” as opposed to February’s outlook when Republicans were more positive.
“Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment and inflation,” she continued.
Year-ahead inflation expectations rose from 4.3% last month to 5% this month, the highest reading since November 2022—marking three consecutive months of “unusually” large increases (0.5 percentage points or more). Long-run inflation expectations grew from 3.5% to 4.1%, which Hsu said reflected “a large surge among independents plus a sizable rise among Republicans.”
Hsu also noted that the consumer outlook on unemployment specifically worsened, with “two-thirds of consumers expect(ing) unemployment to rise in the year ahead, the highest reading since 2009.”
“This trend reveals a key vulnerability for consumers, given that strong labor markets and incomes have been the primary source of strength supporting consumer spending in recent years,” she continued.
For the full report, click here.
