Consumer Sentiment Drops Amid Economic Uncertainty
The latest Consumer Sentiment Index from the University of Michigan for March has revealed that consumers are not optimistic about the economy. This measurement showed its first decline in four months, with inflation and turmoil in the financial sector adding to economic uncertainty.
Evidence of Consumer Pessimism
We have already seen evidence that consumers are fairly pessimistic about certain aspects of the economy. For instance, Jennifer Lee, a senior economist at BMO Capital Markets stated that, “Yeah, I don’t think anyone’s comfortable with such high prices”.
Relieving News: Inflation Expectations
However, there is some relieving news as well. The University of Michigan survey data suggests that people expect less inflation in the longer term. This shows that consumers are optimistic that we are finally starting to control inflation.
Optimistic About Jobs
Further, Ataman Ozyildirim, a representative from the Conference Board, found that people are more optimistic about job prospects. He states that, “In terms of their expectations, six months hence, consumers were slightly more positive about labor market conditions.”
Consumers Spending Habits
Ozyildirim also found that people plan to spend less on discretionary items such as the lottery, amusement parks and movies. On the other hand, people say they plan to spend more on necessities such as auto maintenance, home repair, and health care. .