Consumer sentiment in the U.S. has seen a substantial improvement in the month of May, according to a report released by Thomson Reuters and the University of Michigan on Friday, with the consumer sentiment index rising to its highest level in nearly six years.
The report showed that the preliminary reading on the consumer sentiment index for May came in at 83.7 compared to the final April reading of 76.4.
With the sharp jump, the consumer sentiment index came in well above economist estimates for a reading of 78.0 and reached its highest level since July of 2007.
Jennifer Lee, senior economist at BMO Capital, said, "This much better-than-expected report indicates that stock markets at record highs, appreciating house values, and a generally stronger economy (notwithstanding the softer patch we're currently in) does good things to confidence."
The much bigger than expected increase by the consumer sentiment index reflected improvements in both consumers' assessments of current economic conditions as well as their expectations.
The report said the barometer of current conditions jumped to 97.5 in May from 89.9 in April, while the expectations index surged up to 74.8 from 67.8.
On the inflation front, one-year inflation expectations were unchanged at 3.1 percent, while the five-to-ten-year inflation outlook dipped to 2.8 percent in May from 2.9 percent in April.
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