By Jeffrey Sparshott
U.S. consumer optimism slipped in March as a slight bump in
gasoline prices and bad weather weighed on lower-income
households.
The University of Michigan final March sentiment index
registered at 93.0, up from the preliminary reading of 91.2 but
below the final February reading of 95.4.
"Importantly, most of the recent variation was among
lower-income households, whose budgets are more sensitive to higher
utility costs and disruptions in work hours," said Richard Curtin,
chief economist at Michigan's Surveys of Consumers.
By contrast, middle- and upper-income households registered
gains in confidence in the March survey, Mr. Curtin said.
Economists surveyed by The Wall Street Journal expected a
reading of 92.0 for the end-March index.
This month's final current conditions index fell to 105.0 from
106.9 at the end of February. The expectations index decreased to
85.3 from 88.0.
Despite the slightly softer March reading, consumer sentiment
has been broadly positive. Consumer optimism reached a 10-year high
at 95.5 in the first quarter of 2015, the survey said.
"Such optimism is in line with our expectation for consumer
spending to kick the year off with a solid first quarter," Derek
Lindsey, analyst at BNP Paribas, said in a note to clients. "We are
looking for services spending to offset recent weakness in retail
sales."
U.S. retail sales fell for the third consecutive month in
February as a mix of bad weather and consumer caution outweighed an
improving labor market and cheap gasoline prices. And while
payrolls have been growing steadily, limited wage gains, soft
business and other indicators suggest the economy may be hitting a
rough patch in the first quarter of the year.
Mr. Curtin said expanding job opportunities and an uptick in
wages should induce a rebound in consumer spending for the rest of
the year.
According to the Michigan survey, the one-year inflation
expectations in March increased to 3.0% from the end-February rate
of 2.8%. Inflation expectations covering the next five to 10 years
edged up to 2.8% from 2.7%.
Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com