US consumer sentiment was surprised at a low of more than two years in March, but the reserve gauge released by the University of Michigan proved to be far weaker than economists had expected.
Preliminary results show that the index fell to 57.9 compared to 64.7 a month ago, according to a report on Friday. The readings show the lowest level mark since November 2022, researchers compiling the data said. According to Financial-Data Company Factset, economists expected consumer trust to be relatively stable.
The results “reflect the great uncertainty about economic policies raised by the Trump administration,” Carl Weinberg commented in high frequency economics. “Consumer spending could be carefully curtailed until Trump’s economic agenda is revealed.”
“Policy uncertainty has dragged consumer sentiment to the lowest level as inflation peaked more than two years ago, sending stock markets into the correction territory and forecasters effectively increased the probability of a recession,” commented Daniel Horn, former deputy director of the National Economic Council.
More Americans are expressing concern
Consumers expect to see an increase inflation rate of 4.9% the following year. The highest expectations since 2022. It’s softened a little In February, more Americans expressed concern about the economic impact of President Trump’s ongoing trade war as tariffs Import tax It is paid by companies such as Walmart and Target.
“Layoff headline Claxon, stock market declines and tariff fears hit consumer confidence in early March,” Bill Adams, chief economist at Comerica Bank, said in an email. “Private backs with confidence are becoming a real threat to consumer spending, which accounts for two-thirds of US economic activity, as is often repeated.”
Consumers now expect rising inflation to become a long-term problem, with prices predicting a rise in 3.9% annual clip over the next five to ten years, the biggest monthly jump since 1993, the survey found. This is far higher than the Federal Reserve’s inflation target, which cuts the annual rate to 2%.
