2023.03.3114:49:00UTC+00U.S. Consumer Sentiment Deteriorates More Than Previously Estimated In March

Revised data released by the University of Michigan on Friday showed U.S. consumer sentiment deteriorated by more than previously estimated in the month of March.

The report said the consumer sentiment index for March was downwardly revised to 62.0 from the preliminary estimate of 63.4. Economists had expected the index to be downwardly revised to 63.2.

With the bigger than expected downward revision, the consumer sentiment index is well below the final February reading of 67.0.

Surveys of Consumers Director Joanne Hsu said recent turmoil in the banking sector had limited impact on consumer sentiment, noting sentiment 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," said Hsu. "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."

The decrease by the headline index came as the current economic conditions index fell to 66.3 in March from 70.7 in February, while the index of consumer expectations slid to 59.2 from 64.7.

The report also said one-year inflation expectations dropped to 3.6 percent in March from 4.1 percent in February, falling to the lowest level since April 2021.

Meanwhile, five-year inflation expectations came in at 2.9 percent for the fourth consecutive month and stayed within the narrow 2.9-3.1 percent range for 19 of the last 20 months.