Reflecting more positive expectations for future economic growth, the University of Michigan released a report on Friday showing that U.S. consumer sentiment has improved for the fourth straight month in January.
The preliminary report said the consumer sentiment index climbed to 93.3 in January from the final December reading of 92.6. Economists had expected the index to inch up to 93.0.
The bigger than expected increase by the headline index came as the index of consumer expectations climbed to 85.7 in January from 82.7 in December.
On the other hand, the report showed a pullback by the current economic conditions index, which dropped to 105.1 in January from 108.1 in December.
Richard Curtin, the survey's chief economist, said, "Personal financial prospects have remained largely unchanged during the past year at the most favorable levels since 2007 largely due to trends in inflation rather than wages."
"Indeed, expected wage gains fell to their lowest level in a year in early January, but were more than offset by declines in the expected inflation rate," he added.
On the inflation front, the report said one-year inflation expectations fell to 2.4 percent in January from 2.6 percent in December, while five-year inflation expectations inched up to 2.7 percent from 2.6 percent.
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