US consumer sentiment declined in March for the first time in four months, according to the University of Michigan's monthly preliminary reading.
The figure came in at 63.4, down from 67 in February but up year-over-year from 59.4. Analysts had expected 67, according to reports.
Notably, the decrease was already largely locked in prior to the collapse of Silicon Valley Bank, said surveys of consumers director Joanne Hsu. About 85% of respondent interviews had already been completed when the bank failed.
The decline in sentiment was felt most among lower-income, less-educated and younger consumers, as well as consumers with the top tercile of stock holdings, Hsu said.
On a more positive note, respondents expect inflation to get better.
The survey’s reading of one-year inflation dropped to 3.8%, down from 4.1% in February and as low as its been since April 2021. The five-year inflation outlook fell to 2.8%, below the 2.9-3.1% range for just the second time in the last 20 months.
However, that’s still above the Federal Reserve’s stated target of 2%.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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