Thursday, April 18, 2024

U.S. consumer sentiment increases for a third straight month


(Bloomberg) -- US consumer sentiment improved for a third month in February as Americans grew more optimistic about the outlook for the economy and inflation.

The sentiment index edged up 0.6 point to 79.6, the highest since July 2021, according to the preliminary February reading from the University of Michigan. The median estimate in a Bloomberg survey of economists called for a reading of 80.

Consumers expect prices will climb at an annual rate of 3% over the next year, up from the 2.9% expected in January but close to levels seen in early 2021, the Friday data showed. They see costs rising 3% over the next 5 to 10 years.

While prices remain high, Americans are taking solace in the fact that inflation has largely been cooling. That, combined with a labor market that continues to support resilient consumer spending, is contributing to the recent improvement in sentiment.

“Consumers continued to express confidence that the slowdown in inflation and strength in labor markets would continue,’’ Joanne Hsu, director of the survey, said in a statement. She pointed to five-year business expectations at their highest in more than three years.

Government data out earlier Friday showed wholesale prices climbed in January by more than forecast on higher services costs. Still, the Michigan report showed that the share of consumer blaming high prices for eroding living standards dropped to a two-year low.

A measure of expectations rose to 78.4 this month, the highest since July 2021. Meanwhile, the current conditions gauge edged down to 81.5.

Buying conditions for durable goods eased but remained above year-ago levels. While consumers’ perception of their current financial situation improved slightly, their expectations eased.

--With assistance from Chris Middleton.

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