Consumer sentiment took a dive in March as concerns about rising prices and slowing economic performance hit home for U.S. households. Sentiment fell for the third straight month, dropping 12 percent from its February reading in the University of Michigan’s benchmark survey. Sentiment was 28 pe rcent lower than it was in March of last year. Inflation expectations among consumers for the year ahead rose to 5 percent, up from 4.3 percent last month. This marked the highest reading since 2022 as well as three months of expectation increases that Michigan pollsters described as “unusually large.” The downturn in sentiment took place across the political spectrum, with both Republicans and Democrats experiencing a souring mood. “Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment, and inflation,” pollsters said in an analysis. Inflation as measured by the personal consumption expenditures (PCE) price index held steady in Commerce Department data released Friday at an annual increase of 2.5 percent. “Core” inflation, which removes the more volatile categories of energy and food prices and to which the Federal Reserve pays particular attention in setting interest rates, jumped to a 2.8-percent annual increase from 2.7 percent in February. Faltering consumer sentiment has been registered in other recent surveys as well, notably in the Federal Reserve Bank of New York's Survey of Consumer Expectations. Feelings there “deteriorated considerably” in February, with the percentage of households expecting to be financially worse off in the coming year rising to 27.4 percent, the highest level since November 2023. Expectations for price levels, unemployment and debt delinquency all rose in the Fed’s February survey. The stock market fell off a cliff during Friday trading, likely on news of higher core inflation, with the Dow Jones Industrial Average of major U.S. companies down more than 1.5 percent in midday trading. Business sentiment also sharply decreased in the latest National Federation of Independent Business (NFIB) survey. That survey’s uncertainty index clocked the second-highest recorded reading in its history, possibly reflecting a trade policy and regulatory agency overhaul currently being undertaken by the Trump administration. ...read more read less