Consumer sentiment in the U.S. rebounded by much more than expected in the month of May, according to a report released by the University of Michigan on Friday, with the consumer sentiment index reaching an eleven-month high.
Preliminary results showed that the consumer sentiment index jumped to 95.8 in May after slumping to a seven-month low of 89.0 in April.
Economists had expected the consumer sentiment index to show a much more modest uptick to a reading of 89.7.
With the much bigger than expected increase, the consumer sentiment index rose to its highest level since reaching 96.1 in June of 2015.
Richard Curtin, the survey's chief economist, said, "Consumer sentiment rebounded in early May due to more frequent income gains, an improved jobs outlook, and the expectation of lower inflation and interest rates."
"The largest gains were recorded among lower income and younger households, although the gains were recorded among all income and age subgroups as well as across all regions," he added.
The much bigger than expected increase by the headline index was partly due to a jump by the expectations index, which surged up to 87.5 in May from 77.6 in April.
With the substantial increase, the expectations index shot up to its highest level since reaching 87.8 in June of 2015.
The current economic conditions index also reached its highest level since last June, rising to 108.6 in May from 106.7 in April.
On the inflation front, the one-year inflation outlook dipped to 2.5 percent in May from 2.8 percent in April, while five-year inflation expectations inched up to 2.6 percent from 2.5 percent.
by RTT Staff Writer
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