Consumer Sentiment:  Further Rebound

Bottom Line: Consumer sentiment jumped in the preliminary March reading, driven almost entirely by an increase in expectations for real incomes, mostly among lower income survey respondents. Sentiment actually fell among respondents in the top third of incomes. While there are hints of caution given that marginal consumption typically comes from higher income earners, the overall level of consumer sentiment is still strong. Both current conditions and expectations were higher as 1-year ahead inflation expectations fell slightly as 5-year inflation expectations rose. Consumer Sentiment ROSE by 4.0 points in early March to 97.8%, compared with market expectations for an increase to 95.6%. Despite this month's modest increase, sentiment is now 3.6% BELOW its year ago level. Current Conditions ROSE by 2.7 points to 111.2%. This is 8.3% BELOW their year ago level. Consumer Expectations ROSE by 4.8 points to 89.2%. With this month's modest increase, expectations are 0.5% ABOVE its year ago level.