Washington – Consumer sentiment decreased to its lowest levels in months as Americans worry about the health in U.S. economic outlook. The University of Michigan (UM) latest index dipped to 91 in March, from 91.7 in February.
The recent Michigan’s sentiment index reported a variation of 0.8 percent of March levels compared to February’s. Even though Richard Curtin, chief economist of UM surveys, said that consumer confidence inched upward in late March due to more favorable economic expectations.
Median projection in a Bloomberg survey which involved economists called for a reading of 90.5, the results were higher due to Americans grew more upbeat about their own finances, offsetting less favorable views in economic growth, as reported by Chicago Tribune.
Gas prices may have a role in the lower level, which have increased 17 percent since last month. The average gallon of U.S. gasoline is currently in $2.06, from $1.76 in February, according to the Washington Post.
“We saw some fairly rapid increases in gasoline prices over the course of late February to the end March,” said Terry Sheehan, an economic analyst at Stone & McCarthy in Princeton, New Jersey. “Changes in gas prices always make consumers uncomfortable. It is kind of a wake-up call to consumers that those exceptionally low prices are not going to be holding on forever,” he added.
A more cautious spending
As the Americans have become more cautious about their own spending, which explains the increase of just 0.1 percent of the consumer spending ticked, the job market remains in a healthy position. Weaker consumer spending expectations forecast urged economist to cut their first-quarter forecast under 1 percent.
On Friday, a government report indicated the addition of 215,000 jobs in March. However, the unemployment rate rose to 5 percent this month from 4.8 in February due to many Americans started a massive job-hunt.
Source: The Washington Post