U.S. Consumer Sentiment Advances to One-Year High on Outlook
(Bloomberg) -- U.S. consumer sentiment improved in early March by more than forecast, reaching a one-year high as more vaccinations and fiscal relief boosted optimism in the economic outlook.
The University of Michigan’s preliminary sentiment index jumped to 83 from 76.8 in February, data released Friday showed. The figure exceeded the median projection of 78.5 in Bloomberg’s survey of economists.
“The data indicate strong growth in consumer spending during the year ahead, with the largest percentage gains for services, including travel and restaurants,” Richard Curtin, director of the survey, said in the report. “Half of all consumers in early March reported hearing of favorable economic developments, with the largest positive gains involving jobs.”
A measure of the economic outlook advanced to the highest level since February of last year, in anticipation of the $1.9 trillion economic stimulus package signed Thursday by President Joe Biden.
The report also showed stronger buying conditions for durable goods, with the index rising to a one-year high and suggesting spending will heat up in coming months. The increase in sentiment follows recent reports showing a January pickup in retail sales.
The gauge of current conditions rose to a one-year high of 91.5 from 86.2, while a measure of expectations increased 6.8 points to 77.5, according to the survey conducted from Feb. 24 to March 10.
Investors and policy makers are watching carefully for signs of inflation. According to the Michigan report, consumers expect prices to rise 3.1% in the next year. In February, they anticipated 3.3% inflation in the coming 12 months.
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