The final April reading on the Thomson Reuters/University of Michigan Consumer Sentiment Index rose to 84.1, near its highest reading since 2007. A survey of economists by Bloomberg had a consensus estimate for a reading of 82.5, compared with a preliminary reading of 82.6 earlier this month. In July of 2013, the index reading was 85.1, and the final March reading was a weak 80.0.
The survey’s measure of current economic conditions rose from 95.7 to 98.7. The subindex measuring consumer expectations also rose, from 70.0 to 74.7. Expectations for one-year inflation were unchanged from March at 3.2%, and five- to ten-year inflation expectations rose also remain unchanged at 2.9%.
The survey’s chief economist noted:
The most important issue is whether or not consumers will show greater resistance to the backslides that have repeatedly occurred in the past few years. Resilience among consumers is dependent on positive long term economic expectations.
Consumers have become more optimistic about job gains even though they expect only modest improvement in the country’s unemployment rate. Low mortgage interest rates are attracting more home buyers, although first-time buyers continue to face lender qualification hurdles.
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