FX.co ★ U.S. Consumer Sentiment Index For March Unexpectedly Upwardly Revised

The University of Michigan recently shared an updated report suggesting an unforeseen rise in U.S. consumer sentiment for March. The consumer sentiment index was upwardly adjusted to 79.4 from the earlier reported 76.5, contrary to economists' expectations for the reading to remain unchanged.

The index for March exceeds the final reading for February, which was 76.9, hitting its peak since July 2021, when it was at 81.2. Furthermore, the current economic conditions index increased to 82.5 in March from February's 79.4, while the index of consumer expectations also saw a hike to 77.4 from 75.2 seen in February.

Joanne Hsu, the Director of Consumers Surveys, commented that consumer sentiment remained virtually constant throughout the first quarter of 2024, being just below the middle point between the pre-pandemic level and the historic low observed in June 2022. This persistence reflects consumers' perception of a stable economy. She further noted that as the election season progresses and economic policy debates become more prominent, consumers' economic outlook might become more fluctuant.

The report also mentioned a slight decrease in inflation expectations for the next year, dropping to 2.9 percent in March from 3.0 percent in February. Nevertheless, this stays within the 2.3-3.0 percent range observed in 2018 and 2019 for the third consecutive month.

Long-term inflation expectations also declined to 2.8 percent in March from 2.9 percent in February, yet remain slightly higher when compared to the 2.2-2.6 percent range seen in the two years before the pandemic.