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

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

• The Index of Consumer Sentiment rose to a reading of 79.4, up from 76.9 in February. This is a month-over-month increase of 3.3% and up 28.1% year-over-year (62.0 in March 2023).
• Current Economic Conditions increased to a reading of 82.5, up from 79.4 in February. This is a month-over-month increase of 3.9% and up 24.4% year-over-year (66.3 in March 2023).
• The Index of Consumer Expectations increased to a reading of 77.4, up from 75.2 in February. This is a month-over-month increase of 2.9% and up 30.7% year-over-year (59.2 in March 2023).

In remarks and analysis prepared to accompany the release of the final results for March, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment recorded an incremental increase of less than three index points from February, well within the margin of error and stable since January. Critically, consumers exhibited confidence that inflation will continue to soften. Assessments and expectations of personal finances improved modestly from last month, as the perceived negative effects of high prices and expenses on living standards eased. Strong stock market performance this month supported sentiment gains only for those with the largest holdings, with little impact on the index. Overall, sentiment is essentially unchanged throughout the first quarter of 2024, remaining just shy of the midpoint between the pre-pandemic level of sentiment and the historic trough from June 2022. This stability reflects a perception among consumers that the economy has been holding steady in its current state. As the election season progresses and debates over economic policy become more salient for consumers, their outlook for the economy could become more volatile in the months ahead.

Year-ahead inflation inched down from 3.0% last month to 2.9% this month. For the third straight month, short-run inflation expectations have fallen within the 2.3–3.0% range seen in 2018 and 2019. Long-run inflation expectations also inched down, from 2.9% to 2.8%, and remain modestly elevated relative to the 2.2–2.6% range seen in the two years pre-pandemic.”