University of Michigan Releases Final Results of Its Consumer Sentiment Index for March

On Friday, the University of Michigan released the final results of its Surveys of Consumers for March.

• The Index of Consumer Sentiment fell to a reading of 53.3 in March, down 5.8% from 56.6 in February. Year-over-year, the index was down 6.5% from 57.0 in March 2025.
• Current Economic Conditions fell to a reading of 55.8 in March, down 1.4% from 56.6 in February and down 12.5% from 63.8 a year earlier.
• The Index of Consumer Expectations fell to 51.7 in March, down 8.7% from 56.6 in February and down 1.7% from 52.6 in March 2025.

In remarks accompanying the release, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment fell back 6% this month to its lowest level since December. Declines were seen across age and political party. Consumers with middle and higher incomes and stock wealth, buffeted by both escalating gas prices and volatile financial markets in the wake of the Iran conflict, exhibited particularly large drops in sentiment. Overall, the short-run economic outlook plunged 14%, and year-ahead expected personal finances sank 10%, while declines in long-run expectations were more subdued. These patterns suggest that, at this time, consumers may not expect recent negative developments to persist far into the future. These views are subject to change, however, if the Iran conflict becomes protracted or if higher energy prices pass through to overall inflation. Interviews for this release were collected between February 17 and March 23, with about two-thirds completed after the start of the US military conflict in Iran.

Year-ahead inflation expectations climbed from 3.4% in February to 3.8% this month, the largest one-month increase since April. The current reading exceeds those seen in 2024 and remains well above the 2.3–3.0% range seen in the two years pre-pandemic. Long-run inflation expectations inched down to 3.2%. In 2024, values ranged between 2.8% and 3.2%, while in 2019 and 2020, they were consistently below 2.8%. Note that for both time horizons, interviews completed after February 28 exhibited higher inflation expectations than those completed before that date.”