May US Consumer Sentiment Rises To More Than 4-Year High

The Thomson Reuters/University of Michigan preliminary May reading on the overall index on consumer sentiment improved to 77.8 from 76.4 in April, topping forecasts for 76.2.

It was the highest reading since January 2008.

Despite the recent slowdown in job growth, nearly twice as many consumers reported hearing about new job gains than said they had heard about recent job losses, the survey said.

The data suggests that either more positive numbers on the labor market will be seen soon, or that consumers have ratcheted up their expectations too high, survey director Richard Curtin said in a statement.

The most likely prospect is that job growth returns to a modest pace of gains and consumers trim their overly optimistic expectations, with not much change in overall confidence until after the November (presidential) election and the decisions on tax policy, said Curtin.

Consumers' buying plans for vehicles and durable goods also improved at the beginning of the month, with 65 percent saying buying conditions were favorable, the highest in more than a year.

U.S. stocks .SPX held onto losses immediately after the data, before trading at flat levels. Treasuries maintained their gains, and the dollar rose against the yen.

The survey's barometer of current economic conditions also rose to its highest in more than four years, jumping to 87.3 from 82.9.

The gauge of consumer expectations slipped to 71.7 from 72.3, however.

Consumers' assessment of their personal financial situations remained dismal, with just 29 percent of households saying their finances had improved, unchanged from a year ago.

The survey's one-year inflation expectation continued to ease after a run-up earlier in the year, falling to 3.1 percent from 3.2 percent. The survey's five-to-10-year inflation outlook edged up to 3.0 percent from 2.9 percent.