University of Michigan sentiment preliminary for March 57.9 versus 63.1 estimate

• Prior month 64.7
• Consumer sentiment 57.9 versus 63.1 estimate. Lowest since November 2022
• Current conditions 63.5 versus 65.0 estimate
• Expectations 54.2 versus 64.3 estimate
• 1 year inflation expectations 4.9% versus 4.3% last month.
• 5 year inflation expectations 3.9% versus 3.5% last month

US stocks have moved lower on the report but remain positive. Yields are higher with the 10-year at 4.310%, +3.6 basis points.

Looking at the breakdown from a political standpoint:

For Dems:

• Consumer sentiment fell from 51.3 to 41.4
• Conditions fell from 73.9 to 62.0.
• Expectations fell from 36.8 to 28.2

For Rep:

• Consumer sentiment fell from 86.7 to 83.9
• Conditions rose from 55.7 to 65.4
• Expectations fell from 106.6 to 95.7

For Independents:

• Consumer sentiment fell from 62.6 to 57.2
• Conditions rose from 68.0 to 65.8
• Expectations fell from 59.1 to 51.8

From the Director Joanne Hsu

Consumer sentiment slid another 11% this month, with declines seen consistently across all groups by age, education, income, wealth, political affiliations, and geographic regions. Sentiment has now fallen for three consecutive months and is currently down 22% from December 2024. While current economic conditions were little changed, expectations for the future deteriorated across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets. Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences. Consumers from all three political affiliations are in agreement that the outlook has weakened since February. Despite their greater confidence following the election, Republicans posted a sizable 10% decline in their expectations index in March. For Independents and Democrats, the expectations index declined an even steeper 12 and 24%, respectively.

Year-ahead inflation expectations jumped up from 4.3% last month to 4.9% this month, the highest reading since November 2022 and marking three consecutive months of unusually large increases of 0.5 percentage points or more. This month’s rise was seen across all three political affiliations. Long-run inflation expectations surged from 3.5% in February to 3.9% in March. This is the largest month-over-month increase seen since 1993, stemming from a sizable rise among Independents, and followed an already-large increase in February.

The indices can be politically motivated. The terms numbers are

This article was written by Greg Michalowski at www.forexlive.com.