The preliminary University of Michigan Consumer Sentiment Index for March rose 4.0 points to 97.8 from 93.8 in February, its highest since 98.3 in December. Consumer confidence remains solid, if a bit lower and more uneven than in the past year or two.
Consumers’ perceptions of conditions improved for the first time in three months, up to 111.2 in March from 108.5 in February. The outlook for six months from now was up for a second month in a row to 89.2 from 84.4 in the prior month.
Consumer optimism continues to be buoyed by the strong labor market and the prospect of higher earnings and by an outlook for moderate growth to remain on track.
Inflation expectations for March reflect little evidence that wage inflation is seeping into overall prices or that consumer prices are rising significantly in the near term. The more volatile 1-year inflation expectation measure was down two-tenths to 2.4%, the lowest since 2.4% in October 2017. However, the 5-year inflation measure was up two-tenths to 2.5%, and back in line with the underlying trend after a dip in February.
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