University of Michigan's consumer confidence index revised higher

US consumer confidence fell slightly in March on worries about the global economic slowdown, a report showed on Friday.

The University of Michigan’s final reading of its consumer confidence index came in at 91.0 in March, up from a previous estimate of 90.0, but down from 91.7 in February. However, it was better than the 90.5 economists had been expecting.

The report revealed that consumers anticipated the slower pace of economic growth might lead to an increase in unemployment.

The index of current economic conditions declined to 105.6 in March from 106.8 in February while the index of consumer expectations fell to 81.5 from 81.9.

“What was surprising was that the expectations of higher gas prices and higher unemployment have not caused an increase in uncertainty about personal financial prospects,” the report said.

“To be sure, the positive outlook for consumer spending is contingent on the view held by most consumers that the jobless and inflation rates will be maintained close to their current low levels. Overall, the data still indicate a 2.7% rate of growth in personal consumption during 2016.”

Capital Economics said it expects consumer confidence to rise soon as financial conditions improve and employment gains remain healthy.

The US non-farm payrolls report on Friday showed a better-than-expected increase in jobs added to the economy and a pick-up in wage growth. While the unemployment rate rose unexpectedly, the participation rate increased.

“All things considered, despite the decline in consumer confidence in March, the details of the report are encouraging and further support our view that the apparent weakness in consumption at the start of the year will only be temporary,” said Steve Murphy, US economist at Capital Economics.