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US consumer sentiment at 3 month high

Friday, August 17 16:26:55

U.S. consumer sentiment improved in early August to its highest in three months as sales at retailers and low mortgage rates spurred Americans to boost their buying plans, a survey released today showed.

But concerns about rising food prices caused a jump in both short- and long-term inflation expectations, the Thomson Reuters/University of Michigan consumer sentiment survey showed.

The preliminary reading on the index on consumer sentiment rose to its highest level since May at 73.6 from 72.3 last month, topping economists' forecasts for a slight uptick to 72.4.

Americans were also more optimistic about the state of the economy with the measure of current economic conditions rising to its highest level since January 2008 at 87.6 from 82.7.

Purchasing plans were bolstered by cheap prices and the measure of buying conditions for household durables rose to 140 from 130.

"Consumers are feeling a little better about the current economy, though a little more concerned about the outlook," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis, Missouri.

Consumer expectations cooled and the majority of households expected no income increase during the year ahead. The expectations index slipped to 64.5 from 65.6, the lowest level since December. (C ) Reuters