Preliminary data released by the University of Michigan on Friday showed a significant improvement in U.S. consumer sentiment in the month of March.
The report said the consumer sentiment index jumped to 97.8 in March from the final February reading of 93.8. Economists had expected the index to rise to 95.3.
The bigger than expected increase by the index came as more positive assessments from lower income households more than offset a drop in sentiment among households with incomes in the top third.
“Since households with incomes in the top third account for more than half of all consumer expenditures, cautious observers will conclude that the latest data are another indication that the end of the expansion is on the distant horizon,” said Surveys of Consumers chief economist Richard Curtin.
He added, “While that may well be true, the current level of consumer sentiment at 97.8 hardly indicates an emerging downturn.”
The report also said the current economic conditions index rose to 111.2 in March from 108.5 in February, while the index of current expectations climbed to 89.2 from 84.4.
On the inflation front, one-year inflation expectations fell to 2.4 percent in March from 2.6 percent in February but five-year inflation expectations increased to 2.5 percent from 2.3 percent.
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