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Consumer sentiment rises to record high

Xinhua,March 30, 2018 Adjust font size:

CHICAGO, March 29 (Xinhua) -- The Consumer Sentiment Index was 101.4 in March, up from 99.7 in February and 96.9 in last March, and reaching the highest level since 2004, according to the University of Michigan (UM) Surveys of Consumers released on Thursday.

The Current Conditions Index was 121.2 in March, up from 114.9 in February and 113.2 in the same period of last year, reaching the highest level ever recorded. The Expectations Index was 88.8 in March, as against 90.0 in February and 86.5 in the same period of last year.

The main factor driving discretionary spending is that consumers remain confident in their future job and income prospects, which is anchored more in the stability of these economic prospects rather than the size of the expected gains, said UM economist Richard Curtin, director of the surveys. Overall, the data are consistent with the 2.6-percent growth rate in personal consumption expenditures from mid-2018 to mid-2019.

Recent financial progress was noted by 57 percent of consumers in March, an all-time peak since 1998. Half of all households cited higher incomes and nearly two-thirds cited rising home values. While these gains were widespread, future financial prospects improved among the lowest income households and declined among the highest-income households.

Consumers reported more negative news about trade policies, with unfavorable references rising to 31 percent from February's 18 percent. While six-in-10 consumers reported that the overall economy had recently improved, half as many anticipated additional gains in the pace of economic growth during the year ahead.

"The consensus expectation among consumers is that interest rates will increase in the foreseeable future," Curtin said.

"The trade-off between spending and saving will crucially depend on the pace of future interest rate hikes compared with the pace of income growth. It is likely that income growth will initially dominate, tilting consumers' motives more toward spending than saving," he added. Enditem

 

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