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US Consumer Sentiment Declines in March: Reuters/University of Michigan

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US Consumer Sentiment Declines in March: Reuters/University of Michigan

US consumer confidence unexpectedly dropped this month, a sign household spending may be slow to pick up after a long winter.

The overall index of consumer sentiment, courtesy of Thomson Reuters and the University of Michigan, declined from 81.6 to 79.9, the preliminary reading showed today. This was the lowest level for the index since November. Economists expected sentiment to improve this month amid signs household spending was on the rise.

Consumers’ appraisal of the current situation improved slightly, led by a modest improvement in personal finances. Consumers’ outlook on the economy was more pessimistic, with respondents saying bigger payroll gains are needed to drive personal spending.

Escalating tensions in the Ukraine did not have any noticeable impact on consumer sentiment this month, according to survey director Richard Curtin.

“Overall, consumers continued to demonstrate their resilience in the face of a long and harsh winter,” Curtin said in a press release. “[Consumers] have not recognized any implications for the domestic economy from the Russian incursion into Ukraine.”

The report comes one day after the Commerce Department said retail sales rebounded sharply in February. Receipts at retail stores rose 0.3 percent last month, after declining 0.6 percent in January. Economists expect sales to increase in the spring as warmer weather and improving finances unleash pent-up demand.

A separate report today showed producer inflation unexpectedly cooled last month. The Labor Department’s index of producer prices decreased 0.1 percent in February, following a gain of 0.2 percent the previous month. Compared to a year ago, inflation at the producer level rose 0.9 percent, compared to 1.2 percent the prior month.

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