Shoppers are seen at Whole Foods Market on October 14, 2022, in Atlanta, Georgia.
Elijah Nouvelage | Afp | Getty Images
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What you need to know today
The bottom line
American consumer sentiment seems to be holding steady even as inflation concerns linger.
The closely watched University of Michigan’s reading came in at 76.5 in March, slightly below consensus.
“After strong gains between November 2023 and January 2024, consumer views have stabilized into a holding pattern; consumers perceived few signals that the economy is currently improving or deteriorating,” said Joanne Hsu, the survey’s consumers director.
The survey’s one-year inflation expectations were unchanged at 3.0% in March and inflation outlook for the long-term was steady at 2.9% for the fourth straight month.
Still, there are worrying signs consumer spending could be slowing down amid sticky inflation and high borrowing costs.
Retail sales rose less than expected at 0.6% in February while January’s decline was revised even lower to 1.1%.
“It is increasingly evident that after years of a devil-may-care approach to spending, consumers have at last shown signs of being more reserved at the start of this year,” Wells Fargo said in a note last week.
The latest Bank of America report also showed inflation is taking a toll on Americans as card spending was weak in February.
“More broadly, retail (i.e., goods and food services) spending has been slowing down over the last few quarters, as goods inflation has fallen sharply and services inflation has remained elevated,” the bank said.
“The risk is that sticky services inflation will further shrink retail’s wallet share, to the extent that real spending also slows down.”
— CNBC’s Lisa Kailai Han contributed to this report