Univ. of Michigan: Consumer Sentiment Up Slightly, Well Off Highs

NEW YORK – U.S. consumer sentiment rose unexpectedly in March but job worries still prevented Americans from feeling too cheery about the economy, a survey released on Friday showed.

The University of Michigan's (search) final reading of consumer confidence edged up to to 95.8 in March from 94.4 in February, said market sources who saw the subscriber-only report.

"It's nothing to get too excited about," said Steven Wood, chief economist at Insight Economics (search).

A preliminary mid-month reading had left the index at 94.1, while economists had been looking for a dip in the final sentiment measure to 93.7.

The index stood at 103.8 but has tumbled since then as a growing impatience with the economy's inability to generate jobs deters a full-fledged rebound in confidence.

Wood said he was surprised that rising gasoline prices, sagging stock markets and the deadly bombings in Madrid had not been a greater drag on consumers' spirits.

As long as Americans have extra money from tax refunds, he said, they will remain relatively confident in their financial position. But that does not mean they are not worried about losing their jobs.

"Current conditions are telling me, 'give me the tax refund', but expectations are saying 'hey, unless we create a lot of jobs, I just don't think I can be terribly optimistic about the economy,"' Wood said.

The current conditions index climbed to 106.8 in March from 105.7 in February, while the consumer expectations component inched up, to 88.8 from 88.5 last month.

In February, a scant 21,000 jobs were created across the giant U.S. economy. Analysts worry that if jobs do not pick up strongly, spending could falter. But so far, swings in consumer sentiment have had no correlation with actual buying habits.

Spending is expected to hold up at least until later in the tax season, when refunds from the last round of tax cuts feed through.

The University of Michigan preliminary survey is based on telephone interviews with about 250 households on personal finances and business and buying conditions. The final survey at the end of the month covers about 500 households.