U Mich. Consumer Sentiment Surges

U.S. consumer sentiment vaulted to its highest level since December 2000 in March as job prospects and business conditions improved six months after the Sept. 11 attacks, making Americans feel better about the present conditions.

The University of Michigan's preliminary consumer sentiment index rose to 95.7 from 90.7 in February. Forecasts were for a reading of 95.1. The data are released directly to market subscribers only and were obtained by Reuters Thursday.

The current conditions index, which measures consumers' attitudes about their present financial situation, surged to 100.4 from 96.2 in February. The expectations index, which tracks attitudes about the 12 months ahead, rose to 92.7 from 87.2.

Economists watch consumer confidence indexes because they can give clues on the future direction of consumer spending, which underpins two thirds of the U.S. economy. Consumer spending has remained strong through the current recession, but some analysts fear a recovery could be sluggish because there is little pent-up consumer demand.

The consumer sentiment survey is based on telephone interviews with roughly 500 Americans across the country on personal finances, business conditions and buying conditions. A competing index from New York research group The Conference Board surged in March to its highest level since August.