UMich: Consumer Sentiment at Highest Level in 18 Months

U.S. consumer sentiment rose in May to its highest level in 1-1/2 years as improving reports on the economy and a measure of calm in the Mideast helped lift consumers' assessment of current conditions and future hopes.

The University of Michigan's final May consumer sentiment index rose to 96.9 from 93.0 in April, slightly above the preliminary May reading of 96.0 released two weeks ago, market sources said Friday. Forecasts were for the index to hold at 96.0. The data are released directly to market subscribers only and were obtained by Reuters.

Retail sales in April doubled analysts' forecasts and personal spending also surged, ensuring a strong start to second quarter growth after last year's mild recession. Consumer spending underpins two-thirds of the U.S. economy.

The final current conditions index, which tracks consumers' views about their present financial situation, rose to 103.5 in May from 99.2 in April, also up from a preliminary reading of 103.2. The expectations index, which measures attitudes about the 12 months ahead, rose to 92.7 in May from 89.1 in April. The preliminary reading was 91.3.

The University of Michigan consumer sentiment survey is based on telephone interviews with roughly 500 Americans across the country on personal finances and business and buying conditions.