U.S. Consumer Sentiment Index Falls

U.S. consumers took on a darker view of economic conditions early this month, according to data released Friday.

The Thomson-Reuters/University of Michigan consumer sentiment index's preliminary-March reading declined to 71.8 from the final February reading of 77.6, according to an economist who has seen the report.

Economists surveyed by Dow Jones Newswires had expected the early-March index to increase to 78.0.

The current conditions index edged down to 87.5 from the final-February level of 89.0, while the expectations index dropped sharply to 61.7 from 70.2.

The sentiment index is the lowest since December 2011. The expectations index is the lowest since November 2011.

Consumers are being pushed and pulled by various economic factors. On the positive side, job growth picked up strongly in February, stock and home prices are rising, and gasoline prices have come down from the February highs.

But consumers seem to be focusing on the negatives: higher taxes are cutting into take-home pay and the dysfunction in Washington has triggered federal spending cuts that eventually will reduced government jobs and economic activity.

Despite the swings in gas prices consumers see little change in inflation. The one-year inflation expectations reading for early March remained at 3.3% in late February. The inflation expectations covering the next five to 10 years slipped to 2.9% from 3.0%.

Write to Kathleen Madigan at kathleen.madigan@dowjones.com

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  03-15-131045ET
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