(MENAFN) The University of Michigan's consumer survey final results released on Friday revealed that the index of consumer sentiment in the US declined in March, marking the first decline in four months. The index dropped a massive five points to 62.0 in March, from 67.0 in February. According to Surveys of Consumers Director Joanne Hsu, "This month's turmoil in the banking sector had limited impact on consumer sentiment, which was already exhibiting downward momentum prior to the collapse of Silicon Valley Bank." She added that "overall, our data revealed multiple signs that consumers increasingly expect a recession ahead."
The index of current economic conditions also decreased by 4.4 points to 66.3 in March, down from 70.7 in February. Meanwhile, the index of consumer expectations plummeted by 5.5 points to 59.2 from 64.7 during the same period.
Hsu also noted that year-ahead inflation expectations receded from 4.1 percent in February to 3.6 percent, the lowest reading since April 2021. The decline in inflation expectations suggests that consumers may be becoming more cautious about spending, as they anticipate lower prices in the future.
The decline in consumer sentiment reflects growing concerns among consumers about the state of the economy and the potential for a recession. The ongoing COVID-19 pandemic, rising inflation, and supply chain disruptions have all contributed to a sense of uncertainty and volatility in the economy, which may be dampening consumer confidence.
The decline in consumer sentiment is a cause for concern, as consumer spending makes up a significant portion of the US economy. If consumers become more cautious about spending, it could lead to a slowdown in economic growth. Policymakers and business leaders will need to monitor consumer sentiment closely and take steps to address any underlying issues that may be contributing to the decline in confidence.
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