US consumer confidence holds up better than expected in March

Americans were in more buoyant spirits than expected in March amid broad-based gains in income, according to the results of one of the most closely-followed surveys of US consumer sentiment.

The University of Michigan's consumer confidence index improved from a reading of 93.8 at the end of February to 98.4 in March.

A preliminary reading for the index had printed at 97.8.

A sub-index linked to consumer expectations meanwhile improved from a reading of 108.5 to 113.3, with another that tracks consumer expectations rising from 84.4 to 88.8.

According to the survey director, Richard Curtin, improved sentiment was solely due to income gains among those in the bottom two-thirds of the income distribution, which saw a 7.1 point gain in index points, while those in the top third registered a drop of 1.1 index points.

"Middle and lower income households more frequently reported income gains than last month, although income gains were still widespread among upper income households," Curtin said.

"Indeed, the last time a larger proportion of households reported income gains was in 1966," he said.

Meanwhile, expectations for inflation in the year ahead dropped and all income groups voiced more favourable growth prospects for the US.

The data also suggested that consumers were anticipating further interest rate hikes, Curtin said.

The survey compiler also noted that not enough interviews had been carried out after the release of the Mueller report so as to have an impact on the March figures.

"Overall, the data do not indicate an emerging recession but point toward slightly lower unit sales of vehicles and homes during the year ahead."