As predicted, rising gas prices and the spiral of bad weather brought down the consumer confidence level in March, according to the Surveys Of Consumers March report from the University of Michigan.
Consumer optimism hit a 10-year peak in the first quarter of 2015, according to the report, but a March 2015 score of 93 on the consumer sentiment index was still a dip from February’s 95.4 index score. The monthly survey conducted by the Survey Research Center examines the Index of Consumer Sentiment. Recent consumer sentiment variation was attributed to lower income households, a rising increase in gas prices and harsh weather that trickled from last month.
The consumer confidence index is used to judge how optimistic consumers are about the economy in relation to how they are spending/saving money. The survey indicated that in the first quarter of 2015, consumer spending wasn’t strong, but for 2015 it is expected to grow 3.3 percent. While consumer confidence dipped from last month’s figures, it is a significant increase from March 2014, which recorded an 80 on the consumer sentiment index, the report said.
Speaking toward what impacted this month’s results, here’s what Surveys of Consumers Chief Economist Richard Curtin reported: “The harsh winter weather and the small rebound in gas prices caused some slippage in consumer confidence since the start of the year. Nonetheless, expanding job opportunities as well as more favorable wage gains have meant that consumer spending will strongly rebound during the balance of the year.”
He also provided what may help increase the consumer sentiment in months to come, which focused on credit conditions.
“The appeal of attractive pricing as a spending driving force has begun to fade, and has been increasingly replaced by more attractive credit conditions. The greater sensitivity of consumers to credit conditions will increase the power of the Fed’s actions, so that they can accomplish more with a smaller change than was true in the past,” he added.
The survey, which factors in the perspective of 500 people randomly selected from across the U.S., is used to judge sentiment about consumer confidence including: personal finances, business conditions and future buying plans.
In February, the record-low freezing temperatures across the nation also brought a chilling effect to consumer confidence due to rising gas costs and harsh weather — ending the 11-year high since 2004. It seems that trend continued into March.
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