U.S. consumer sentiment in the month of May improved by more than previously estimated, according to a report released by Reuters and the University of Michigan on Friday, with the consumer sentiment index upwardly revised to a new multi-year high.
The report showed that the consumer sentiment index for May was upwardly revised to 79.3 from the mid-month reading of 77.8. The upward revision surprised economists, who had expected the index to come in unchanged.
With the upward revision, the index came in well above the final April reading of 76.4 and is now at its highest level since October of 2007.
A notable upward revision to the reading on consumer expectations contributed to the upward revision by the headline index, with the consumer expectations index for May upwardly revised to 74.3 from the mid-morning trading of 71.7. The index is now above April's 72.3.
On the other hand, the current economic conditions index for May was downwardly revised to 87.2 from 87.3, although it remains well above the April reading of 82.9.
Peter Boockvar, managing director at Miller Tabak, said, "The improvement in confidence is good to see as a part of sentiment is also related to the labor market, but this number is only a coincident one and thus tells us nothing about how consumers will behave looking forward."
With regard to inflation, one-year inflation expectations for May were downwardly revised to 3.0 percent from 3.1 percent, coming in below 3.2 percent in April.
Five-year inflation expectations for May were also downwardly revised to 2.7 percent from 3.0 percent and compare to 2.9 percent in the previous month.
Meanwhile, the Conference Board is scheduled to release its report on consumer confidence in the month of May next Tuesday.
Last month, the Conference Board said its consumer confidence index edged down to 69.2 in April from a downwardly revised 69.5 in March. Economists had expected the index to slip to 69.7 from the 70.2 originally reported for the previous month.
by RTT Staff Writer
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