Consumer sentiment rebounded from a midmonth dip to finish February at the highest level in a year, buoyed by recent employment gains.
The Thomson Reuters/University of Michigan index rose to 75.3 from a preliminary February reading of 72.5. Economists surveyed by Econoday expected a more modest increase to 73, with a consensus range between 71 and 76.5.
Final February numbers registered at the highest level since 77.5 a year ago, the best reading since the financial crisis.
“Consumers have shrugged off concerns about rising gas prices, the European crisis and election-year politics, preferring to focus on the favorable impact of job growth,” said Richard Curtin, chief economist of the survey.
A record number of survey respondents said they heard of employment growth, and more consumers since 2004 expected a decline in the jobless rate. That comes after a slow but steady drop in unemployment to 8.3% in January, its lowest level in nearly three years.
But it’s likely, according to Curtin, growth in consumer spending “may only edge up to a brisk walk, at best.” More consumers, for the 41st straight month, reported income declines than those reporting increases. Just 8% of respondents expect a rise in income in the coming year.
A reading of 100 represents exceptionally high consumer sentiment benchmarked in 1966. The twice-monthly index surveys consumers on financial status, employment and economic attitudes.
