Consumer Sentiment Hit Record High This March

A new survey from the University of Michigan found that despite the recently proposed trade tariffs, consumer sentiment in March 2018 hit a peak level, the highest since 2004.

The continued rise of interest rates could be shifting how consumers are currently spending their money. Survey of Consumers Chief Economist Richard Curtin tells HousingWire that “Consumers understand that interest rate hikes are intended to dampen the future pace of economic growth. Their reaction will both emphasize borrowing-in-advance of those expected increases as well as heighten their precautionary savings motives." He added that the impact of wage growth will help tilt the balance from saving to spending, "Overall, the data are consistent with a growth rate of 2.6 percent in consumption from mid-2018 to mid-2019."

The Index of Consumer Sentiment rose 1.7 percent from 99.7 in February and 4.6 percent from 96.9 in March 2017 to 101.4 in March this year. “Consumer sentiment at month's end was marginally below the mid-month reading due to uncertainty about the impact of the proposed trade tariffs,” Curtin said. “The Sentiment Index, however, still reached the highest level since 2004, and the Current Conditions Index set a new all-time peak.”

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