Ann Arbor, Mich. -- A report released Friday by Thomson Reuters/University of Michigan showed that confidence among U.S. consumers fell more than forecast in March, precipitated by a surge in fuel prices.
The Thomson Reuters/University of Michigan Consumer Sentiment Index fell to 68.2, the lowest in five months, from 77.5 in February. The gauge was projected to decline to 76.3, according to a Bloomberg News survey. The index of expectations plunged to the lowest level since March 2009.
The nine-point drop in sentiment this month was the biggest since October 2008, the last time average gasoline prices topped $3.50 a gallon.
Estimates for the confidence measure ranged from 74 to 80, according to the Bloomberg survey. While the index averaged 89 in the five years leading up to the recession that began December 2007, it hasn’t reached that level since the recovery started in June 2009.
“Consumers are reacting to the run-up in gas prices, which accelerated in the middle of February,” Ryan Wang, an economist at HSBC Securities USA in New York, told Bloomberg. “It’s taking up a bigger portion of their wallet. If fuel prices rise even further, it could be a threat to consumer spending.”