The University of Michigan released a preliminary Michigan Consumer Sentiment report for March. The report indicated that Consumer Sentiment declined from 76.9 in February to 76.5 in March. However, the data missed consensus forecasts, as economists looked for a reading of around 76.9.
This means that the consumers became slightly less optimistic about the economy this month, though they continue to expect inflation to cool further, a potential sign that price increases will keep slowing.
“Consumer sentiment moved little this month with a 0.4 index point decrease that is well within the margin of error, and thus sentiment has been steady and essentially unchanged since January 2024. Sentiment remained almost 25% above November 2023 and is currently halfway between the historic low reached during the peak of inflation in June 2022 and pre-pandemic readings,” Joanne Hsu, the director of surveys said.
“Small improvements in personal finances were offset by modest declines in expectations for business conditions. After strong gains between November 2023 and January 2024, consumer views have stabilized into a holding pattern; consumers perceived few signals that the economy is currently improving or deteriorating. Indeed, many are withholding judgment about the trajectory of the economy, particularly in the long term, pending the results of this November’s election,” he added.
Market reaction to Michigan Consumer Sentiment report
- The U.S. Dollar Index settled near the 103.40 level after the release of the Michigan Consumer Sentiment report.
- Gold is mostly flat, trading near the $2160 level.
- SP500 attempted to settle below the 5120 level after the release of Consumer Sentiment data.