(Washington) The clouds gathering over the American economy are starting to worry consumers once more, with the index measuring their confidence falling in March, to still historically low levels, according to the estimate published on Friday. by the University of Michigan.
The index fell sharply in March, to 63.4 points once morest 67 points in February, i.e. a decline of 5.4% over one month, while analysts rather anticipated a slight improvement in confidence, which they expected to 67.2 points, according to the consensus published by briefing.com.
“The decline predates the bankruptcy of Silicon Valley Bank (SVB), by which time 85% of the survey had already been completed,” Joanna Hsu, director of the survey, said in the statement. “The decline is concentrated among consumers with lower incomes and lower education levels as well as among young people, but also in the upper third of those holding stocks”.
The decline concerns both current conditions and expectations. In the latter case, the index stands at 61.7 points, down 4.9% over one year.
“The decline is explained in particular by the persistence of inflation, which feeds the downward momentum of the sentiment” of consumers, added Mr.me Hsu.
Despite everything, the latter are now counting on lower inflation this year than what they envisaged in February, at 3.8% once morest 4.1%, the lowest level observed since April 2021. But it is still good higher than the expectations in this area observed before the pandemic, which were established in the range between 2.3% and 3%.
Although declining, inflation remained very high in February, at 6% according to the benchmark CPI index.
The Federal Reserve (Fed), however, favors another measure of inflation, the PCE index, which it wants to bring back to around 2%, but which rose once more in January, to 5.4% over one year.
The Fed is due to announce on Wednesday whether it is continuing to raise its rates, today between 4.50% and 4.75%, or whether it prefers to pause to give the banking sector time to absorb the shock caused by the bankruptcy of SVB and two other regional banks, Signature Bank and Silvergate, and to ensure the rescue of a fourth, First Republic.
