Consumer Sentiment: 5.4% Inflation Hurts Expectations

Bottom Line:  Year-ahead inflation expectations hit 5.4%, the highest since 1981, as the final reading for March consumer sentiment held near the recent lows. Inflation was spontaneously mentioned in responses to nearly all the survey questions. Consumers reported reduced living standards due to inflation more than any all other times except during the recession of 1979-191 and during the Great Financial Crisis. On the plus side, consumers continued to report strength in the labor market. Overall, consumer balance sheets are still flush with cash from stimulus funds, but they are increasingly worried about how far that will go as they expect sharply higher prices in the coming months.Consumer Sentiment was UNCHANGED in late March to 59.7, in line with market expectations.  Sentiment has deteriorated by -10.9 points over the past 3 months. With this month's modest decline, compared to February's final level of 62.8, sentiment is 29.7% BELOW its year-ago level.Current Conditions were UNCHANGED at 67.80. Current conditions are now 27.1% BELOW their year-ago level.
 
Consumer Expectations were at 54.4.   With this month's decline, compared to February's final level of 59.4, expectations are 31.7% BELOW their year-ago level.