U.S. consumers' mood brightened a bit in March, nudged up by increased confidence in government economic policy, but overall sentiment remained near an all-time low, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its final index of sentiment rose to 57.3 in March from 56.3 in February. This was a touch above economists' median expectation of a 56.6 reading, according to a Reuters poll.
The survey hit a record low of 51.7 in May, 1980.
The index of consumer expectations rose to 53.5 from 50.5. Survey director Richard Curtin said confidence in the Obama administration's economic policies improved consumers' mood, with 22 percent of those surveyed rating policy favorably in March, compared with 7 percent in January.
Americans' view of their present situation remained dim, with the index of economic conditions slipping to 63.3 in March from 65.5 in February.
Although the data indicate that the downward momentum in confidence ended in the closing months of 2008, there is no evidence that consumers expect their finances to improve any time soon, Curtin said.
While the survey showed 44 percent of consumers expected government policy to improve their personal finances, an all-time record number of consumers said incomes had declined compared with a year ago.
They also anticipated the smallest annual income gains ever recorded -- 0.2 percent compared to 2.5 percent a year ago.
U.S. stocks pared losses after the sentiment data, while the dollar held its gains against the euro.
Inflation signals were mixed. The report's reading on one-year inflation expectations rose to 2.0 percent from 1.9 percent in February, but five-year inflation expectations fell to 2.6 percent from 3.1 percent.
Overall, there has not been another period in the past quarter century that deflation was more widely anticipated, Curtin said.
(Reporting by Steven C. Johnson; Editing by Chizu Nomiyama)