Consumer sentiment hits 8-month high
U.S. consumer sentiment rose to its highest level in eight months in early February, boosted by recent tax cuts and optimism about the economy, a survey released on Friday showed.
A separate report also suggested stronger consumer activity as the U.S. trade deficit widened slightly more than forecast in December to its highest level in four months.
While consumers were more cheery about the economic and job market recovery, they were less sanguine about the nation's longer-term outlook, according to the latest consumer surveys from Thomson Reuters and the University of Michigan.
The preliminary February reading for the overall index on consumer sentiment came in at 75.1, up from 74.2 in January.
It was the highest level since June 2010 and was roughly in-line with the median forecast of 75 expected by economists polled by Reuters.
Further proof that the U.S. economy is rebounding at a stronger pace than expected. It's been reflected in virtually all recent data outside of inflation data, said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.
The survey's barometer of current economic conditions jumped to 86.8, the highest level since January 2008, while the gauge of consumer expectations slipped to 67.6 from January's 69.3.
U.S. Treasuries touched session highs following the data as some worried about the long-term outlook.
A separate survey of forecasters showed the U.S. economy and jobs market are expected to grow more strongly in the first quarter than previously expected.
The Federal Reserve Bank of Philadelphia's survey of 43 professional forecasters sees the economy growing at an annual rate of 3.6 percent in the current quarter, up from the estimate of 2.4 percent three months ago.
Though employment remains one of the biggest challenges for the economy, there have been signs the job market recovery is continuing, if not gaining speed.
With growth picking up, consumers remain concerned about inflation, the University of Michigan surveys showed. One-year inflation expectations were unchanged at 3.4 percent, the highest rate since the fall of 2008. The five-to-10-year inflation outlook also was unchanged at 2.9 percent.
Concerns over inflation have been creeping up lately as commodity prices rise and on jitters that strength in the economy will force the Federal Reserve to hike interest rates sooner than expected. Nonetheless, the Fed is largely viewed as maintaining its accommodative policy for some time.
(Reporting by Leah Schnurr; Additional reporting by Caroline Valetkevitch and Steve Johnson in New York and Doug Palmer in Washington; Editing by Andrea Ricci)
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