U.S. consumer sentiment surges: report

By Wire services | October 12, 2012 | Last updated on October 12, 2012
2 min read

A monthly gauge of U.S. consumer sentiment jumped higher in early October, pushing past Wall Street’s expectations, says MarketWatch.

Economists had told MarketWatch before the release of the data today that while the index jumped up to a final reading of 78.3 in September, the gauge should be sitting higher on average and would be little changed this time around.

But it seems the mood has shifted down south; the index rose to 83.1, showing consumers are more optimistic about their personal finances, as well as about the business and buying conditions across the country.

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Last month, sentiment also surged by several points and reached its second-highest level in nearly five years. It was pushed by more promising job prospects and a higher number of investors who believe the economy will continue to recover.

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Many are still conflicted about the country’s outlook, though. Investors and analysts are puzzled by conflicting data and an often contradictory picture of the health of the U.S. economy.

They’re told: consumers are more confident, but spending is flat; fewer people are losing jobs but not many are being hired; and that home and stock prices are up, but workers’ pay is trailing inflation.

AP says this is what an economy stuck in a slow-growth rut looks like. And that although solving this economic predicament is a focal point of the current presidential campaign, most economists foresee little if any improvement the rest of the year.

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In the long run, reduced debts and rising home and stock prices will help rebuild household wealth nationwide, boost consumer spending and spur job growth. But it’s taking time.

“The U.S. outlook could best be described as one of near-term weakness and long-term strength,” says Chris Jones, an economist at TD Bank.

Read: Investment managers turn to emerging markets

Wire services