U.S. consumer sentiment improved a tad in February to rack up a year high as Americans became more confident about the economy’s resilience, a survey released on Friday showed.
The Thomson Reuters/University of Michigan’s final reading of the overall index on consumer sentiment came in at 75.3, edging up from 75.0 the month before. It was the highest level since February 2011.
It surpassed economists’ expectations of 73.0 and recovered from a decline to 72.5 in February’s preliminary reading.
“It is not that surging oil prices, instability in the Mideast, the European crisis or uncertainties about future tax and spending policies could not ultimately derail the recovery, but that consumers expect the pace of overall economic growth to continue to slowly restore lost jobs despite these potential problems,” survey director Richard Curtin said in a statement.
The survey’s barometer of current economic conditions eased to 83.0 from 84.2 but its gauge of consumer expectations rose to its highest in a year, at 70.3 from 69.1.
Mr. Curtin said the divergent components suggested “the overall gain was anchored by the expectation that the recovery has legs, even if the pace edges up to a brisk walk, at best.”
A third of consumers spontaneously reported hearing about more job opportunities, the highest proportion ever recorded by the survey.
The U.S. jobless rate unexpectedly fell to a three-year low in January, stoking hopes the labor market is healing. But the national average price of U.S. gasoline rose 3.5 cents Thursday to $3.647 (U.S.) a gallon, according to motorist group AAA.
“It’s quite clear right now consumers seem to be putting greater weight on labour market conditions than they are on energy market conditions,” said Anthony Chan, chief economist at JPMorgan Private Wealth Management in New York.
“To the extent that labour market conditions continue to improve ... we would hope consumers will be able to withstand the current pressure of higher energy prices.”
Consumers’ outlook for the economy and job growth was more positive than their views on their own finances. Improving finances were reported by 27 per cent of respondents, down from 29 per cent in January.
The survey’s one-year inflation expectation held steady at 3.3 per cent, while the survey’s five-to-10-year inflation outlook rose to 2.9 per cent after sitting at 2.7 per cent for four months.
Financial markets saw little reaction to the data with Wall Street little changed in early trading after a rally that has taken stocks to levels not seen since before the collapse of Lehman Brothers.