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U.S. consumer sentiment fell more than expected in early March as gasoline prices surged to a record high in the aftermath of Russia's war against Ukraine, boosting one-year inflation expectations to the highest level since 1981, Reuters reported. The third straight monthly decline reported by the University of Michigan on Friday pushed consumer sentiment to its lowest level in nearly 11 years. It said 24% of respondents "spontaneously mentioned the Ukraine invasion in response to questions about the economic outlook." The University of Michigan's preliminary consumer sentiment index dropped to 59.7 in the first half of this month, the lowest reading since September 2011, from a final reading of 62.8 in February. Economists polled by Reuters had forecast the index falling to 61.4. The survey places more emphasis on gasoline prices and the stock market. The Conference Board's consumer confidence index, which puts more weight on the labor market, remains well above its COVID-19 pandemic lows. Economists said that the continued slump in the University of Michigan's sentiment index was overdone relative to fundamentals and they expected the economy to continue growing.

Visa Inc. and Mastercard Inc. are preparing to increase the fees that many large merchants pay when they accept consumers’ credit cards, the Wall Street Journal reported. The fee increases — delayed during the past two years because of the pandemic — are scheduled to kick in next month. U.S. merchants paid card issuers an estimated $55.4 billion in Visa and Mastercard credit-card interchange fees in 2021, more than double the amount in 2012, according to the Nilson Report. They pass along at least some of these costs to the consumer in the form of higher prices. More merchants have started charging consumers extra when they pay with credit cards. (Subscription required.)

Ann Taylor’s former owner has obtained bankruptcy court approval for its revised reorganization plan after a judge rejected certain legal protections for people and entities connected to the company contained in an earlier version of the plan, Reuters reported. U.S. Bankruptcy Judge Frank Santoro of the Eastern District of Virginia signed off on Mahwah Bergen Retail Group Inc.’s amended plan during a brief hearing on Thursday. Mahwah, formerly known as Ascena Retail Group, had secured approval of its prior plan last year but was forced to return to bankruptcy court in January after the plan's so-called nondebtor releases that would have shielded non-bankrupt individuals and entities from future litigation were voided on appeal. Ascena filed for chapter 11 protection in July 2020 with more than $1 billion in debt, part of the wave of retail bankruptcies that occurred in the first few months after the COVID-19 pandemic hit the U.S. Ascena later sold its assets, including apparel retailers such as Ann Taylor, Lane Bryant and Loft, to private equity firm Sycamore Partners. In January, U.S. District Judge David Novak of the Eastern District of Virginia held that the nondebtor releases contained in the plan were void and unenforceable. Judge Novak’s decision did not interfere with the Sycamore sale, which had already closed. In his January decision, Judge Novak called the releases “shocking” and said that the bankruptcy court that approved them had exceeded “the constitutional limits of its authority.” As a result, Mahwah, which now exists solely to wind down its estate, reworked the plan to provide that the releases "should be deemed severed from the Plan,” according to court papers.

President Biden used his State of the Union address to refocus the nation on how far the economy has come since the pandemic recession. But he also highlighted his plans to help slow rapid price gains, underscoring the challenge Democrats face ahead of the midterm elections: Inflation is painfully high, voters are unhappy about it, and the most tried and true way to cool price increases involves hurting growth and the labor market, the New York Times reported. Biden struck a defiant tone in the face of that glum outlook, insisting that his administration can take steps — including encouraging corporate competition and strengthening a supply chain that has struggled to keep up with consumer demand — to slow price increases without dragging down employment and pay. The challenge is that White House policies have historically served as a backup line of defense when it comes to containing inflation, which is primarily the Federal Reserve’s job. The central bank is prepared to move swiftly in the coming months to raise interest rates, making money more expensive to borrow and spend. Higher rates are meant to slow hiring, wage growth and demand enough to tamp down price increases. It is possible that inflation could ease up so much on its own this year that the Fed will be able to gently slow the economy toward a sustainable path. But if price gains remain rapid, the Fed’s playbook for combating overheating is by inflicting economic pain. That makes inflation — which is running at the fastest pace in 40 years — a major liability for the Biden administration, one that the president addressed repeatedly Tuesday night and called his “top priority.” It is undermining consumer confidence by chipping away at paychecks and causing sticker shock for consumers trying to buy groceries, couches or used cars. Biden said his administration would begin a “crackdown” on ocean shipping costs, which have soared during the pandemic. He suggested that the administration wanted to cut the cost of prescription drugs, an ongoing push of his.

U.S. auto dealers, flush with cash, are buying each other at a record pace, but they are not closing stores in the process. Defying predictions that the internet and Tesla Inc's direct-to-consumer sales strategy would kill traditional auto dealerships, acquisitions in the sector hit a record $8 billion in value last year, according to data from Kerrigan Advisors, a company that tracks transactions among largely private auto dealer groups. That is more than triple the $2.5 billion for 2020. Most of the buyers were large public or private auto retail chains, such as Asbury Automotive Group Inc. and Lithia Motors Inc. Many of the sellers were smaller, family-controlled operations, said Erin Kerrigan, founder of Kerrigan Advisors. "We had 338 unique transactions in the industry," Kerrigan said. "The prior peak was 288 in 2020." Publicly traded dealer groups bought over 250 dealerships last year, she said. Despite the deal activity, the number of stores that car buyers could visit has remained stable for the past decade, according to a survey by Urban Science, a consultancy. As of July 1, 2021, Urban Science counted 18,157 dealerships, or "rooftops," in the United States, up 46 stores from six months earlier. In 98% of local markets in the United States, Urban Science found no net change in the number of auto dealerships. In short, ownership has consolidated, but the U.S. auto retail infrastructure has not. "As far as the public goes, it looks like the same number of dealers are out there," said Urban Science Global Director of Data Mitch Phillips. For consumers, the consolidation of auto dealer ownership could be largely invisible in the short term. But longer term, industry executives say larger dealer groups will be better equipped to deploy technology to enable faster online shopping and financing, allow customers to select from a wider array of vehicles at multiple stores and get repairs done more conveniently.

Seritage Growth Properties, a real estate investment trust that emerged from the Sears bankruptcy, is exploring strategic alternatives including a sale of the company, Bloomberg News reported. New York-based Seritage, which owns property from Alaska to Florida, is working with the investment bank Barclays Plc on the plans. Seritage is open to a full sale of the company or piecemeal disposal of assets. The plans aren’t final and the company could still decide to change course. A representative for Seritage declined to comment while a representative for Barclays couldn’t be reached for comment. Prospective buyers could include private equity firms, real estate companies and former Sears Chief Executive Officer Eddie Lampert, who currently serves as chairman of Seritage, the people added. Lampert owns a 22.1% interest in the company and owns about 9.3% of the Class A shares, according to a filing last November. A representative for Lampert didn’t immediately respond to a request for comment.

After initially shutting down factories and stores, the pandemic sparked demand for goods as home-bound consumers funneled stimulus money into shopping sprees rather than trips and dining out. But supply snarls continue to hamper producers, Reuters reported. Earlier this week, the world's No.4 carmaker Stellantis told investors that raw materials like metals would remain a problem for the industry this year. But the company said that the semi-conductor shortage, which cost the company about 20% of its planned production last year, peaked in the third quarter. A key question for economists now is to what degree inflation coursing through the economy is becoming a circular force, with higher prices at gas pumps and grocery stores fueling demands from workers for higher wages, adding again to pressure for more price hikes. U.S. consumer prices rose at their fastest annual rate in four decades in January. For now, it remains unclear whether a spiral will be averted, though most Federal Reserve policymakers remain optimistic that inflation will ease as supply chains untangle later this year and into next, although Russia's invasion of Ukraine may complicate the central bank's efforts to rein in inflation this year.