A recent survey by the University of Michigan headed up by Chief Economist Richard Curtin, found that consumer sentiment fell to a decade record low as concerns about inflation increased amid the continuing Russian incursion into Ukraine, as per a report.
The University of Michigan Consumer Sentiment Index (MCSI), a monthly measure of how consumers think about the state of the economy, personal finances, business conditions, and purchasing conditions, came to an end in March 2022 with 59.4%, which represents a 5.4% decrease from the reading of 62.8% in February 2022. It also showed a 30% decline from the index’s reading of 84.9% one year ago by March 2021.
The end of March reading of 59.4% is down 0.5% from an already decade low of 59.7% reported in mid-March.
Curtin, who formerly provided shipment forecasts for the RV Industry Association, said that policymakers should consider the Russian attack on Ukraine that began on February 24, which is the leading cause of economic instability, with the emergence of the new COVID variants also a significant factor.
The survey revealed that inflation is the most significant reason behind the rise in pessimism, with an expected annual inflation rate of 5.4%, the highest since November 1981.
“When asked to explain changes in their finances in their own words, more consumers mentioned reduced living standards due to rising inflation than any other time except during the two worst recessions in the past fifty years: from March 1979 to April 1981 and from May to October 2008,” Curtin said.
“Moreover, 32% of all consumers expected their overall financial position to worsen in the year ahead, the highest recorded level since the surveys started in the mid-1940s.”
This article originally appeared on Fox Business.