Consumer Sentiment Tumbles as Inflation Expectations Hit 41 Year HighJohn Carney 11 Mar 2022
Consumer sentiment sank in early March to the worst level since 2011 and year-ahead inflation expectations rose to a 41-year high.
The University of Michigan’s said its consumer sentiment index dropped to 59.7 from 62.8 in February. The median estimate of analysts in Econoday’s survey called for a reading of 61.7 following February’s 62.8.
Consumers expect prices to rise 5.4 percent over the next year, the highest reading since 1981, according to the data. That’s suggests that inflation may have accelerated further in early March and that higher gasoline prices are significantly moving expectations.
The index was much higher a year ago, with a reading of 84.9 in March 2021, as vaccines began to roll out and the public expected a quick exit from the pandemic. Inflation was tame, with the consumer price index up just 1.7 percent compared with prior February level and rising 0.4 percent in the month after 0.3 percent in January.
On Thursday, the Department of Labor said the consumer price index had soared 7.9 percent in the 12-months since then and jumping 0.8 percent compared with the prior month.
The index of consumer sentiment was up at 101.0 registered before the Covid-19 pandemic.
“Consumers held very negative prospects for the economy, with the sole exception of the job market,” said Richard Curtin, the survey’s chief economist. “Consumers were slightly more likely to anticipate declines rather than increases in the national unemployment rate.”
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