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Consumer sentiment improved slightly in February to a year high as Americans became more confident in the resilience of the U.S. economy. The Thomson Reuters/University of Michigan overall index on consumer sentiment came in at 75.3 this month, edging up from 75.0 in January to the highest level since February 2011.
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“It is not that surging oil prices, instability in the Mideast, the European crisis or uncertainties about future tax and spending policies could not ultimately derail the recovery, but that consumers expect the pace of overall economic growth to continue to slowly restore lost jobs despite these potential problems,” survey director Richard Curtin said in a statement.
However, the survey’s barometer of current economic conditions cooled to 83.0 from 84.2 last month, though its gauge of consumer expectations rose to its highest in a year, from 69.1 in January to 70.3. The divergent components suggest “the overall gain was anchored by the expectation that the recovery has legs, even if the pace edges up to a brisk walk, at best,” said Curtin.
Roughly one-third of consumers responding to the survey reported hearing about more job opportunities, the highest proportion ever recorded by the survey. “Unfortunately, too few customers have benefited from the recent job gains to alter their otherwise grim evaluations of their own finances,” according this morning’s press release. But most past recoveries have witnessed this same pattern, with consumer optimism about the economy preceding personal financial optimism, according to the report.
The survey’s inflation expectations for 2012 held steady at 3.3 percent, while its 5-to-10 year inflation outlook rose to 2.9 percent after sitting at 2.7 percent for four consecutive months.
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