The University of Michigan’s closely watched Survey of Consumers reported a reading of 57.0 for the month, down 11.9% from February and 28.2% from last year. Economists had expected a slightly higher number.
Inflation concerns drove much of the decrease in consumer sentiment. Respondents now expect inflation to reach 5% in a year, a 0.1 percentage point increase from the previous month’s reading and 0.7 points more than February.
The survey’s index of consumer expectations plummeted to 52.6, down 17.8% from last month and 32% from the same period in 2024. The decrease reflects growing concerns over inflation and economic policy developments.
Economists worry that President Trump’s tariff plans could lead to higher inflation, potentially limiting future interest rate cuts by the Federal Reserve. The report coincided with a Commerce Department announcement of a core inflation rate increase to 2.8% in February, its largest monthly gain since January 2024.
The survey also revealed concerns over the labor market, with consumers expecting an unemployment rate at its highest level since 2009. Stocks took a hit after the release, with the Dow Jones Industrial Average falling over 500 points.
Source: https://www.cnbc.com/2025/03/28/consumer-sentiment-worsens-as-inflation-fears-grow-university-of-michigan-survey-shows.html