Michigan consumer sentiment unexpectedly drops in March

The University of Michigan's preliminary consumer sentiment index unexpectedly fell in March, to a reading of 90.0 from 91.7 in February and versus expectations of 92.2.

This marked the lowest reading since October last year.

The index for current economic conditions came in at 105.6, down from 106.8 in February but up from March 2015’s reading of 105.0.

The index of consumer expectations, meanwhile, fell to 80.0 from 81.9 the previous month and 85.3 in March last year.

A gauge of consumers' expectations five to ten years out rose to 2.7% from 2.5%.

“While consumers do not anticipate a recession, they no longer expect the economy to outperform the 2.4% rate of economic growth recorded in the past two years,” said Richard Curtin, chief economist of the survey.

Capital Economics said the decline in the consumer sentiment index “illustrates that higher gasoline prices more than offset the positive impact to sentiment from the rebound in stock markets”.

Still, it said the rebound in long-term expectations was encouraging.