Softer UMichigan Survey In Final Reading, But Limited Bank Spillover

March UMichigan survey softer in the final vs the prelim, in overall sentiment (62.0 vs 63.4), current econ conditions (66.3 vs 66.4), and consumer expectations (59.2 vs 61.5).

• 1Y inflation dipped to 3.6% from 3.8% prelim, the lowest since April 2021, though 5-10Y ticked up 0.1pp from prelim to 2.9% (same as the prior 3 months).
• From the UMichigan text on the limited impact of the banking sector turmoil on sentiment:
  • "This month’s turmoil in the banking sector had limited impact on consumer sentiment, which was already exhibiting downward momentum prior to the collapse of Silicon Valley Bank. Overall, our data revealed multiple signs that consumers increasingly expect a recession ahead. ... Sentiment fell from 67 index points in February to 63 by March 9, the eve of the failure of SVB, at which time about 63% of this month’s interviews had been completed. Thereafter, sentiment declined just one additional index point."
• So while the report offers further reason to expect economic weakness going forward, it also is the latest report that suggests that the banking crisis is not directly leading to a deterioration in sentiment (following from the Conference Board's latest reading that unexpectedly ticked up despite the survey capturing the post-SVB fallout period).