U.S. Consumer Sentiment at Highest Since 2018
(Bloomberg) -- U.S. consumer sentiment rose to the highest level in almost two years in February on brighter views of finances and the economy, adding to signs consumption will keep fueling growth.
The University of Michigan’s preliminary sentiment index rose to 100.9 from 99.8 in January, according to data released Friday that exceeded estimates in Bloomberg’s survey of economists. The expectations index increased to 92.6, the second-highest reading of the record-long U.S. economic expansion.
- Amid historically low unemployment and steady wage gains, the sixth-straight increase was primarily driven by better ratings of current personal finances and the economic outlook. That suggests economic growth will hold up despite Boeing Co.’s 737 Max production halt and the coronavirus outbreak.
- Net gains in household income and wealth were reported more frequently than at any time since 1960, the report said. When asked about long term prospects for the economy, 51% saw uninterrupted growth, while 39% expected a downturn in the next five years.
- A separate report Friday showed steady consumer spending in January. U.S. retail sales rose 0.3% from the prior month, climbing for a fourth straight month as cheaper prices at the gas pump encouraged Americans to spend on other goods.
- The data follow other measures of consumer sentiment that have remained elevated. The Bloomberg Consumer Comfort Index remains near a 20-year high, while the Conference Board’s consumer confidence index hit a five-month high in January.
“Gains in consumers’ economic assessments have also been accompanied by a faint stirring of two powerful sources of uncertainty,” including the virus outbreak in China and the U.S. presidential election, Richard Curtin, director of the University of Michigan consumer survey, said in a statement.
- Consumer expectations for inflation were stable, with price gains over the coming year unchanged at 2.5%. Five-year estimates slipped to 2.3%, near a record low, from 2.5%.
- The gauge of current conditions decreased slightly to 113.8.
- A measure of buying conditions for household durable goods dropped to the lowest since September.
- Economists had expected the main gauge to edge down to 99.5. Interviews with consumers were conducted Jan. 29 to Feb. 12.
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