US Consumer Sentiment Strongest Since May [View all]
By Shannon Bond in New York
US consumers were more optimistic at the beginning of the year as the outlook for the labour market improved.
Consumer sentiment rose for a fifth straight month to 74 from 69.9 in December, according to the Thomson Reuters/University of Michigan index. That was the highest level since May and higher than the 71.5 reading economists had expected. The survey is still well below the average reading of 89 in the half-decade before the recession that began in late 2007, however.
“More frequent mentions of rising employment lessened income uncertainty and prompted more favourable buying attitudes as well,” Richard Curtin, survey director, said. “The data suggest a stronger consumer spending outlook, rising to about a 2.1 per cent gain in 2012.”
Consumers’ willingness to open their wallets firmed in the final months of last year, with consumer credit surging by $20.4bn in November, the biggest rise in a decade. Stronger than expected job creation in December suggested economic growth is picking up, and sentiment will probably be boosted by the continued fall in the unemployment rate.