Consumer sentiment at five-month low in March

By Reuters
Posted March 11 at 9:39 a.m.

Consumer sentiment fell to its lowest level in five months in early March as gasoline prices rose, a survey released on Friday showed.

Even so, buying plans were largely unchanged and although the rate of real consumer spending will diminish, the report does not indicate a renewed downturn on the horizon, the latest consumer survey from Thomson Reuters and the University of Michigan said.

The preliminary March reading on the overall index on consumer sentiment came in at 68.2, down from 77.5 in February. That was the lowest level since October 2010 and was well off the median forecast of 76.5 among economists polled by Reuters.

“It is quite disappointing. It shows there are going to be some headwinds to consumer spending now that gasoline prices are on the rise from Middle East and North Africa worries,” said Sean Incremona, economist at 4Cast Ltd in New York.

Markets saw little impact following the data. U.S. stocks fell immediately following the release, but most investors were focused on the fallout from a massive earthquake in Japan.

The numbers were in contrast to the retail sales report earlier on Friday, which showed sales posted their largest gain in four months in February as shoppers stepped up purchases of autos, clothes and other goods.

“There could be some economic uncertainty going forward. The retail numbers this morning were positive, but there is probably a big question mark over that now,” Incremona said.

The survey’s barometer of current economic conditions was at 83.6, down from 86.9 the month before and below a forecast of 86.0. The survey’s gauge of consumer expectations tumbled to 58.3 from 71.6, the lowest level since March 2009.

Inflation concerns were still high, with the survey’s one-year inflation expectation rising to 4.6 percent from 3.4 percent in February, the highest since August 2008.

The survey’s five- to 10-year inflation outlook rose to 3.2 percent from 2.9 percent.

Read more about the topics in this post: , ,

Comments are closed.