New York – Confidence among U.S. consumers about their own prospects and those of the wider economy rose by more than expected in the early part of this month, a survey released Friday indicates.
Climbing to 72.4 points from April's 69.8, the preliminary University of Michigan-Thomson Reuters consumer sentiment index for May exceeded the forecasts of most analysts, reaching a three-month high.
Consumers were surveyed after the release last week of data showing the U.S. economy created 244,000 net new jobs last month even as the unemployment rate rose 0.2 percent to 9 percent.
The number of new jobs substantially beat expectations.
"These impressive job gains were mirrored in consumers' evaluations of their personal finances, but those favorable changes were completely offset by rising prices," Michigan survey director Richard Curtin said in a statement.
At the same time, consumer sentiment remains below the February reading of 77.5.
A sub-index intended to measure consumer expectations advanced from 61.6 points in April to 67.4, its highest level since February, and a third of survey respondents said they expected the economy to fare better over the coming year, compared with 25 percent last month.
The survey's gauge of current economic conditions, however, slipped to 80.2 points from 82.5 in April and stands at a seven-month low.
"More consumers than ever before in the long history of the surveys expected a declining inflation-adjusted income in May," Curtin said. "Twin problems confront consumers: lower income and higher price expectations."