Consumer confidence declined in the first half of March as lower-income Americans grew more concerned about prospects for the U.S. economy and higher gasoline prices.

The University of Michigan’s preliminary sentiment index fell to a five-month low of 90 from to 91.7 in February. The median projection in a Bloomberg survey of economists called for 92.2. The group’s measures of year-ahead and longer-term inflation expectations picked up.

The setback in confidence this month was among households at the bottom end of the income scale as prices at the gas pump marched higher. At the same time, the report showed robust labor market conditions are underpinning Americans’ expectations that pay gains will follow suit.

“It appears that the gain in gasoline prices was probably the primary driver of a lower level of confidence,”said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. "Clearly, increases in gasoline prices are particularly felt with lower income households. It’s certainly going to temper sentiment."

Estimates for consumer sentiment from 65 economists in the Bloomberg survey ranged from 90 to 94.

Bloomberg Measure

The Michigan report corroborates the weekly Bloomberg Consumer Comfort Index which has held in a narrow range the entire year. The report’s monthly gauge of expectations about the economy also eased in March to a five-month low.

The Michigan measure of current conditions, which takes stock of Americans’ view of their personal finances, dropped this month to 105.6, the lowest since November, from 106.8 in February.

The gauge of expectations for the next six months decreased to 80, the weakest in six months, from 81.9 in February.

Inflation Expectations

Households expected the inflation rate over the next year will be 2.7 percent, up from 2.5 percent in the first two months of the year. Over the next five to 10 years, consumers projected prices would climb 2.7 percent, up from 2.5 percent last month, which matched the lowest level since the late-1970s.

“It has mostly been due to rising gasoline prices,” Richard Curtin, director of the Michigan Survey of Consumers, said on a Bloomberg conference call after the figures. “The overall firming of core prices has had an effect, but that is slow in coming and it would probably argue that we would see some further increases in the months ahead.”

Respondents expect an almost $1 increase in a gallon of gasoline in the next five years, almost twice as high as in January. Prices at the pump advanced to $1.96 a gallon in mid-March from a seven-year low of $1.70 in February, according to the motoring group AAA.

Recent reports have shown that price pressures are starting to stir. A core measure of consumer prices, which strips out food and fuel, rose 2.3 percent from February 2015, the most since May 2012, data from the Labor Department showed Wednesday.

Buying Conditions

Buying conditions declined slightly this month, the Michigan report showed. Favorable mentions of low prices for big-ticket items fell, with those for vehicles dropping to the lowest level in 15 years.

The Michigan data also showed that 39 percent of households reported that their incomes had recently increased. With inflation low, the fewest consumers since 2008 anticipated price-adjusted income declines in the year ahead.

“What’s keeping personal finances optimistic among consumers is that their meager wage increases have out-distanced the very low inflation rate,” Curtin said.

A healthy labor market has been a catalyst underpinning sentiment. Employers added 242,000 workers in February and the jobless rate held at an eight-year low of 4.9 percent. A report Thursday showed job openings were the third-highest since records began in 2000.

At the same time, hourly earnings increased 2.2 percent in February from the same time a year earlier, in line with the 2.1 percent average since the expansion began in mid-2009.