NEW YORK – The University of Michigan's consumer sentiment index, a closely-watched measure of U.S. consumer sentiment, rose for a fourth straight month to its highest level in a year in January, market sources said on Friday, as hopes for a recovery from recession eclipsed worries about joblessness.
The index surged to 94.2 in early January from 88.8 in December. That was much higher than consensus forecasts of 89.3 and pushed up the index more than 12 points above its recent trough of 81.8 struck after the Sept. 11 attacks.
Economists track consumer sentiment as it can often give clues on future consumer spending, which underpins two-thirds of the U.S. economy. American consumers have remained resilient throughout the current recession, which began in March 2001.
The current conditions index, which measures Americans' attitudes about their present financial situation, edged down to 98.1 in January from 99.0. But the expectations index, which tracks consumer attitudes about the year ahead, roared up to 91.7 in January from 82.3 in December.
The preliminary consumer sentiment survey is based on telephone interviews with roughly 250 Americans across the country on personal finances, business conditions and buying conditions. It is revised with a total of 500 interviews at the end of the month.
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