U.S. personal spending key to rapid recovery: Philip Petursson
U.S. consumer sentiment continued to improve in late March to a one-year high as more Americans got coronavirus vaccinations and business restrictions eased in many states.
The University of Michigan’s final sentiment index increased to 84.9 from a preliminary March reading of 83, according to data Friday. The median projection in a Bloomberg survey of economists called for 83.6.
The gauge of current conditions rose to 93 from a February reading of 86.2, while a measure of expectations increased 9 points to 79.7. The monthly advance in the outlook was the biggest since April 2009.
Consumers’ expectations for inflation over the longer term climbed to an almost six-year high.
The increase in sentiment shows Americans are growing more upbeat about an economic recovery fueled by vaccinations, business reopenings and warmer weather. The passage of the latest round of federal aid is also spurring confidence.
A gauge of the economic outlook over the next year jumped 25 points to a one-year high of 108 in March. Buying conditions for durable goods climbed, with the university’s gauge also advancing to a one-year high.
Still, consumer confidence is well below pre-pandemic levels, signaling that pandemic-related health concerns and a slowly recovering job market are still limiting the improvement.
Investors and policy makers are watching carefully for signs of inflation. Longer-term inflation expectations rose to 2.8 per cent in March, the highest since July 2015, from 2.7 per cent a month earlier.
Consumers expect prices to rise 3.1 per cent in the next year, compared with 3.3 per cent in February, according to the Michigan report.
The Michigan survey was conducted Feb. 24 to March 22.