Financial News: U.S. Consumer Sentiment Deteriorates More Than Previously

U.S. Consumer Sentiment Deteriorates More Than Previously Estimated In March

(RTTNews) - Consumer sentiment in the U.S. deteriorated by more than previously estimated in the month of March, according to revised data released by the University of Michigan on Friday.

The University of Michigan said its consumer sentiment index for March was downwardly revised to 53.3 from a preliminary reading of 55.5. Economists had expected the index to be downwardly revised to 54.0.

With the bigger than expected downward revision, the consumer sentiment index is well below February's final reading of 56.6.

"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," said Surveys of Consumers Director Joanne Hsu.

The slump by the headline index partly reflected a significant deterioration in consumer expectations, with the index of consumer expectations tumbling to 51.7 in March from 56.6 in February.

The report showed a more modest decrease by the current economic conditions index, which dipped to 55.8 in March from 56.6 in February.

"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," said Hsu.

"These patterns suggest that, at this time, consumers may not expect recent negative developments to persist far into the future," she added. "These views are subject to change, however, if the Iran conflict becomes protracted or if higher energy prices pass through to overall inflation."

On the inflation front, the report said year-ahead inflation expectations jumped to 3.8 percent in March from 3.4 percent in February, reflecting the largest one-month increase since April 2025.

Hsu said the current reading exceeds those seen in 2024 and remains well above the 2.3-3.0 percent range seen in the two years pre-pandemic.

Meanwhile, the University of Michigan said long-run inflation expectations edged down to 3.2 percent in March from 3.3 percent in February.

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