Consumer Sentiment in U.S. Climbs to Highest Since 2007 [View all]
By Alex Kowalski - 2012-05-25T14:10:14Z
Consumer confidence rose in May to the highest level since October 2007 as prices at the gas pump became less of a drag on household budgets.
The Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 79.3 from 76.4 the prior month. The gauge was projected to hold at the preliminary reading of 77.8, according to the median forecast of economists surveyed by Bloomberg News.
Cheaper gasoline and an improving housing market may help sustain consumers’ spirits in the face of slower job growth and slumping stock prices. The gain in confidence may signal Americans are more inclined to step up their purchases, which increased in the first quarter at the fastest pace in more than a year.
“Gas prices have fallen, and that’s outweighing the fact that the labor market has been of some concern,” Erik Johnson, a U.S. economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “We see consumer spending holding up.”