CHICAGO, March 26 (Xinhua) — The Consumer Sentiment Index of the University of Michigan (UM) was 84.9 in the March 2021 survey, up from 76.8 in February.
The Expectations component posted a sizable gain to 79.7 in March from February’s 70.7, and the Current Conditions Index rose to 93.0, up from last month’s 86.2.
The UM Surveys of Consumers attributed the rise to the third disbursement of relief checks and better-than-anticipated vaccination progress, as well as better expectations for the national economy.
Favorable economic developments were cited by 57 percent of mentions in March, up from 38 percent in February. For the first time in the past year, more consumers expected good rather than bad times in the national economy during the year ahead, a significant improvement from last month when negative prospects were held by the majority. Expected job gains were a critical component, with continued declines in the jobless rate anticipated by nearly half of all consumers.
Nevertheless, just 33 percent of consumers reported improved financial expectations in March, down from 36 percent in February, and just above the May 2020 low of 32 percent. When asked about expected income gains during the year ahead, the overall figure fell to 1.1 percent from February’s 1.5 percent. Inflation-adjusted income expectations were the lowest in March since January 2017 due to a widely anticipated but relatively modest increase in inflation in the months ahead.
“The recovery is far from complete as less than half of the fall in consumer sentiment has so far been recovered, and the current and prospective stimulus and infrastructure spending has the potential to spark a renewed inflationary psychology, although that will not occur immediately,” said UM economist Richard Curtin, director of the surveys.
UM Surveys of Consumers is a rotating panel survey based on a nationally representative sample that gives each household in the coterminous United States an equal probability of being selected. Enditem