By Eric Morath
U.S. consumer sentiment improved markedly in September, rising to the second-highest level since 2004, only behind the reading in March of this year.
The University of Michigan said Friday its preliminary index of U.S. consumer sentiment was 100.8 this month, up from August's final reading of 96.2. The August reading had been the lowest since January.
Economists surveyed by The Wall Street Journal had expected a preliminary reading of 96.1 for September.
"Consumers anticipated continued growth in the economy that would produce more jobs and an even lower unemployment rate during the year ahead," said the survey's chief economist Richard Curtin.
Consumers' view on the economy's future, the survey's expectations index, rose to 91.1, the highest level since July 2004. Overall consumer sentiment has significantly improved since late 2016, but that gain was most led by near record-high feelings toward the economy's current condition.
If consumers feel optimistic about the future as well, that could support spending and longer-term investments, such as buying a home or a car. A slight majority of survey respondents expect the current economic expansion, which began in mid-2009, will continue uninterrupted over the next five years. If that were to happen, it would be by far the longest period of economic growth since at least World War II, when modern records began.
The improved outlook is "largely due to more favorable prospects for jobs and incomes," Mr. Curtin said.
Expectations for stronger inflation, which had been building this year, cooled in September, helping offset concerns about a declining standard of living.
Consumers are still more positive about current conditions. The current conditions index rose to 116.1 in September, the highest reading since June, and an improvement after two monthly declines.
A negative impact from tariffs was the largest problem cited on the economic horizon, Mr. Curtin said. Concerns about the tariffs' effect on the domestic economy were spontaneously mentioned by nearly a third of all respondent in the past three months, he said, up from one-in-five in the prior four months.
An index level of 100 is equal to the reading in 1966.
Write to Eric Morath at email@example.com
(END) Dow Jones Newswires
September 14, 2018 11:44 ET (15:44 GMT)
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