Consumer Sentiment Holds Strong

Consumer sentiment held strong the last two weeks of the month as the final March index came in at a 14-year high of 101.4 vs 102.0 in the mid-month reading and well up from 99.7 in February.

The current conditions component closed the month at a record 121.2 for a 6.3 point monthly gain which points to strength for March consumer spending. The gain here is tied to rising confidence among lower income respondents in contrast to the expectations component which, at 88.8 and a 1.2 point loss, is being held back by easing confidence among higher income respondents. The report notes that the risk of rising interest rates, tied to Fed policy, is a negative factor for the high-end group.

Inflation expectations, much like the core PCE index released earlier today, are moving up but very slowly, 1 tenth higher for the year-ahead outlook to 2.8 percent with the 5-year outlook unchanged at 2.5 percent.

This report took much longer to get going than other measures of consumer confidence making its positive signal for March, especially for current conditions, a new positive in the indicator mix.