US Consumer Sentiment Rises in March

Consumer sentiment in March unexpectedly jumped to a 14-year high after tax cuts boosted disposable incomes, while new tariffs raised inflation expectations and dimmed the outlook, a University of Michigan survey showed Friday.



The advance in confidence should help underpin consumer spending, the biggest part of the U.S. economy, after a report earlier this week showed a sluggish start to the year for retail sales. A tightening labor market, rising home prices and tax cuts enacted in December are supporting optimism among Americans.

At the same time, the direction of sentiment was split. Respondents in the bottom third of household income posted a 15.7-point gain in the index, while the top third recorded a 7.3-point decline. In addition, President Donald Trump’s tariffs on imported steel and aluminum earned unfavorable mentions in the survey at roughly the same rate as favorable mentions of the tax cuts.

Tariffs dimmed respondents’ prospects for the economy and helped raise inflation expectations, according to the report. Also, respondents’ expected gains in incomes in the year ahead fell to 1.8 percent from 2.2 percent. All of the decline in expected income gains came among respondents in the top third of incomes.

via Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza