Consumer confidence eased in the first half of March as lower-income Americans grew more concerned about prospects for the U.S. economy and higher gasoline prices.
The University of Michigan’s preliminary sentiment index fell to a five-month low of 90 from to 91.7 in February. The median projection in a Bloomberg survey of economists called for 92.2. The group’s measures of year-ahead and longer-term inflation expectations picked up.
All of the decline in confidence was among households at the bottom end of the income scale as prices at the gas pump marched higher. At the same time, the report showed robust labor market conditions are underpinning Americans’ expectations that pay gains will follow suit.
“If you look at the inflation data, it’s been up quite a bit over the last couple of months,” Jacob Oubina, a U.S. economist at RBC Capital Markets in New York, said before the report. “Consumers are noticing that and are wary of that as well.”
Estimates for consumer sentiment from 65 economists in the Bloomberg survey ranged from 90 to 94.
The Michigan report corroborates the weekly Bloomberg Consumer Comfort Index which has held in a narrow range the entire year. The report’s monthly gauge of expectations about the economy also eased in March to a five-month low.
The Michigan measure of current conditions, which takes stock of Americans’ view of their personal finances, dropped this month to 105.6, the lowest since November, from 106.8 in February.
The gauge of expectations for the next six months decreased to 80, the weakest in six months, from 81.9 in February.
