The numbers: A survey of consumer sentiment fell to a four-month low of 62 in March on growing worries about a recession.
The final reading in March was down from an original 63.4, the University of Michigan said. The index registered 67 in February.
Consumer sentiment helps gauge how Americans feel about their own finances as well as the broader economy.
Key details: A gauge that measures what consumers think about the current state of the economy dropped to 66.3 in March from 70.7in the prior month.
More notably, a measure that asks about expectations for the next six months declined to 59.2 from a preliminary 61.5 and 64.7 in February.
The collapse of Silicon Valley Bank and ensuing turmoil in the U.S. banking system only had a “limited impact,” said Joanne Hsu, director of the survey.
The bigger worry is a potential recession. “Our data revealed multiple signs that consumers increasingly expect a recession ahead,” she said.
The concerns were strongest among younger, lower-income and less-educated Americans as well as wealthier people with large stock holdings.
The index had fallen to a record low of 50 last summer before partly rebounding. Sentiment remains well below a recent peak of 88.3 in 2021 and a pre-pandemic high of 101.
Inflation expectations tapered off again. Consumers expect prices to increase 3.6% in the next year, down from 4.1% in the prior month.
That’s the lowest reading since April 2021.
Big picture: Consumer sentiment is far below levels associated with a healthy economy, reflecting persistent worries about a recession.
The Federal Reserve has sharply raised interest rates to tame high inflation, a strategy that typically slows the economy.
Market reaction: The Dow Jones Industrial Average
DJIA,
+0.01%
and S&P 500
SPX,
+0.36%
rose in Friday trades.
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