Are Consumers Still Hesitant About the Future?
Amid a sluggish economy and an overall weak labor market, consumer sentiment is still failing to gain momentum. According to Thomson Reuters/University of Michigan’s final reading, consumer sentiment fell to 80 in March compared to a final reading of 81.6 in February.
The results were slightly worse than expected, as consumers feel less certain about their futures. On average, economists expected the index to reach 80.5 this month. In 2013, consumer sentiment ranged from a low of 73.2 in October to a high of 85.1 in July. The final reading for March was the worst level for consumer sentiment since November, when it reached 75.1 with the help of the government shutdown drama. The gauge has now declined for three consecutive months.
“Current conditions in the overall economy were reported by consumers to have recently weakened, and long term prospects for the economy softened,” survey director Richard Curtin said in a statement.
During the last recession, the index averaged slightly above 64. In the five years before the financial crisis, it averaged almost 90. Consumer sentiment is one of the most popular measures of how Americans rate financial conditions and attitudes about the economy. The University of Michigan’s Consumer Survey Center questions 500 households each month for the index.
Current economic conditions, which measure whether Americans think it is a good time to make large investments, decreased to 95.7 from the preliminary reading of 96.1. However, it improved from February’s reading of 95.4. Consumer expectations dropped to 70 this month from 72.7 in February.
On the positive side, the Conference Board recently reported that its Consumer Confidence Index jumped 5 percentage points to 82.3 in March compared to 78.3 in February. It was the highest reading since January 2008. Economists only expected the index to come in around 78.6. The percentage of consumers expecting business conditions to improve over the next six months increased to 18.1 percent from 17.3 percent, while those anticipating business conditions to worsen declined to 10.2 percent from 13.6 percent.
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