A leading survey of U.S. consumer confidence indicates consumers were less optimistic in early March than they have been through most of 2012, as inflation adds to Americans' concern about their economic future.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to 74.3, from 75.3 in February, the index reported. That reading was below the 76.0 rating that economists, surveyed by both Dow Jones Newswires and Bloomberg News, had set on average.
The drop in the index was due to a decrease in the expectations index, which asks consumers how they foresee their financial situation six months from now. The index component fell to 68.9, from 70.3 the previous month, as consumers saw inflation jumping to 4 percent within a year. The current conditions index increased to 84.2, from 83.0 at the end of February.
That dynamic was the opposite of the one observed in recent months, where consumer sentiment has risen, and where the expectations index has outperformed the current conditions component index. It reflects a churning dynamic in consumers' attitudes, which were lifted by recent growth in the labor market strength despite rising prices for goods, particularly for retail gasoline.