US consumer sentiment ticks down slightly, but most expect inflation to ease further

WASHINGTON (AP) – Consumers have become slightly less optimistic about the economy this month, but still expect inflation to slow further, a sign that price growth may continue to slow.

The University of Michigan Consumer Confidence Index, released in preliminary figures Friday, fell to 76.5 in March, just below February’s 76.9. Americans’ outlooks have remained essentially fixed since their sharp rise in January. Sentiment is currently about midway between the all-time low reached in June 2022, when inflation peaked, and its pre-pandemic average.

Americans’ economic outlook is likely to have a significant impact on the presidential election, and the presidential election will likely focus heavily on how they view President Joe Biden’s economic performance.

Friday’s consumer sentiment data follows this week’s inflation report, which showed prices rising faster than the Federal Reserve’s 2% target for the second month in a row. The consumer price index in February rose 3.2% from the previous year, up from 3.1% in January.

However, a University of Michigan report showed Americans’ outlook on inflation remained unchanged this month compared to February. Consumers expect inflation to be 3% over the next year, the same as last month. It also expects inflation to be 2.9% over the next five to 10 years, unchanged from February. These numbers are above the Fed’s inflation target but only slightly higher than the pre-pandemic average.