| Consensus | Consensus Range | Actual | Previous | |
| Index | 54.3 | 53.0 to 55.5 | 53.3 | 55.5 |
| Year-ahead Inflation Expectations | 3.8% | 3.4% |
Highlights
Sentiment is revised down more than expected to 53.3 for the final March reading versus the 54.3 figure expected, and 55.5 in the March preliminary report. That compares with 56.6 in February and 57.0 in March 2025. The Iran conflict and surging gasoline prices are major problems for consumer sentiment and the effect deepened as they persisted through March.
The 1-year inflation expectations figure is up big to 3.8 percent in the final March reading from 3.4 percent in February. That puts it way above the 2.3 percent to 3.0 percent range pre-pandemic. This is a big problem for the Federal Reserve if these numbers persist.
Market Consensus Before Announcement
The consensus looks for sentiment to be revised down to 54.3 in the final March report from 55.5 in the preliminary March reading due largely to rising energy prices flowing from the Iran war.
Definition
The University of Michigan's Consumer Survey Center questions households each month on their assessment of current conditions and expectations of future conditions. Preliminary estimates for a month are released at mid-month and are based on about 420 respondents. Final estimates are released near the end of the month and are based on about 600 respondents.
Description
The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer sentiment index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.
Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.
