New York, NY, United States (4E) – Consumer sentiment in the U.S. bounced back in February after posting two straight months of disappointing figures, according to a preliminary survey.
The consumer sentiment index released Friday by Thomson Reuters/University of Michigan rose to 76.3 in February from 73.8 in the previous month. The median forecast in a survey by Bloomberg predicted the index to climb to 74.8.
Concerns about the potential drag from the fiscal cliff weighed down readings in December and January, although lawmakers in Washington averted it in a last-minute deal.
U.S. households’ balance sheets are recently boosted by the rising property values and a stock market at its five-year high. Increased wealth help offset recent hikes in gas prices and the impact of the two-percentage point increase in the payroll tax to workers’ take-home pay.
The improving job market is another reason for consumer optimism. Last month, employers added 157,000 jobs after a revised 196,000 figure in December and a 247,000 gain in November. Layoffs are also beginning to decline as shown by falling initial jobless claims.
The latest figure offset weak U.S. industrial production data released on Friday, which saw manufacturing activity contracting 0.1 per cent in January. In a separate report, business activity in the New York area expanded for the first time since July.