March consumer sentiment at 6-month low: UMich

Shoppers browse second-hand clothing at an outdoor flea market in New York March 11, 2007. Consumer sentiment slid in March to its lowest in six months as worries about rising prices and slowing income gains weighed amid an uncertain economic outlook, a survey showed on Friday.

NEW YORK (Reuters) - Consumer sentiment slid in March to its lowest in six months as worries about rising prices and slowing income gains weighed amid an uncertain economic outlook, a survey showed on Friday.

The Reuters/University of Michigan Surveys of Consumers said the final March reading of its consumer sentiment index fell to 88.4 from 91.3 in February, the lowest since 85.4 in September 2006. The preliminary index for March was 88.8.

The median forecast for the final reading among analysts polled by Reuters was 88.5.

Rising prices, slowing income gains and growing concerns in upper-income households about the health of the economy weighed on sentiment, which could take a further hit due to high gasoline prices, a statement accompanying the Reuters/University of Michigan data said.

"Soaring gas prices have the potential to drive confidence down in the coming months, especially among lower-income households," the statement said.

Stocks on Wall Street .DJI and the dollar .DXY held onto the day's earlier gains, while prices of U.S. government bonds US10YT=RR slid after the release, which coincided with data showing surprising gains in U.S. construction spending.

The survey's gauge of current economic conditions fell to 103.5 in March from 106.7 in February. Its final measure on consumer expectations also fell to a six-month low of 78.7 from 81.5 at the end of February.

The survey's one-year inflation index held steady at 3.0 percent for a third straight month and its five-year inflation index was unchanged at 2.9 percent for a second month.

The Reuters/University of Michigan Surveys of Consumers, a monthly series of data on U.S. consumer sentiment, are produced by the University of Michigan in Ann Arbor, Michigan. From January 2007, Reuters has exclusive rights to distribute the data.