Survey: Consumers more optimistic about finances
Consumer confidence remained mostly unchanged between December and March, but consumers are starting to feel more optimistic about their finances for the year, according to Thomson Reuters and University of Michigan’s monthly Survey of Consumers.
The report, out today, said despite harsh winter conditions in much of the country and severe drought in others, the index of consumer sentiment was 80 in March, dipping just 1.6 percent from February. It found that current finances were just as strong in March as in December, but consumers were far more positive now in their financial outlook for the year than they had been, with one in three consumers saying they expect their financial situation to improve.
Most of the gain in confidence was from consumers younger than 45. More than half (54 percent) said they expected improved finances in each of the last two months, the highest level since 2007.
However, the gains in personal finances were offset by rising concerns over the economy as consumers have become more pessimistic about economic conditions for the next half-decade.
Plans for home and vehicle purchases were down in March, the study found, “due to less frequent references to low and discounted interest rates,” suggesting that people have changed how they evaluate interest rates following long periods of low rates.
“Since consumers have become accustomed to very low interest rates on loans, even small increases, which simply tempered demand in the past, could now have a much more pronounced impact on sales of homes and vehicles,” said Chief Economist Richard Curtin. “Consumers are more likely to postpone than to speed-up purchases in advance of expected increases in interest rates.”
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