ANN ARBOR—Consumer sentiment declined in March due to falling inflation-adjusted incomes, which was recently accelerated by rising fuel prices, according to the University of Michigan Surveys of Consumers.
The year-ahead expected inflation rate rose to its highest level since 1981 and expected gas prices posted their largest monthly upward surge in decades. Personal finances were expected to worsen in the year ahead by the largest proportion since the surveys started in the mid-1940s, said U-M economist Richard Curtin, director of the surveys.
Consumers also held very negative prospects for the economy, with the sole exception of the job market. Consumers were slightly more likely to anticipate declines rather than increases in the national unemployment rate. This strength will maintain consumer spending at moderate levels to late 2022, he said.
“Just when difficult decisions need to be made about monetary and fiscal policies, consumers have expressed loss in confidence in government economic policies,” Curtin said. “Moreover, most consumers are uncertain about the ultimate impact Putin’s war will have on their personal economic situation.