A preliminary reading of May consumer sentiment hit its highest level since the recession, suggesting a more positive public outlook of the U.S. economy.
The Thomson Reuters/University of Michigan index registered a reading of 77.8 in its midmonth report Friday, edging out last month’s score of 76.4 and the previous recovery high of 77.5 in February 2011.
Analysts polled by Econoday predicted a slight drop to 76.2 in the preliminary reading for May.
Gas prices likely drove this month’s bolstered confidence, said Amna Asaf, an economist at Capital Economics. Consumers’ assessment of current conditions rose to a four-year high of 87.3 in May, up from 82.9 in April.
But if stock concerns linger, Asaf said any further drop in gas prices “may not be enough to hold up consumer confidence for much longer.”
“We suspect that the final reading of confidence, which will be more affected by the most recent slump in stock markets, could be notably weaker than this,” Asaf wrote in a research note.
The May reading continued an upward trend in consumer confidence since it fell to 55.8 in August, when debt worries and ratings downgrades loomed over the country.
The index surveys households each month on economic conditions, with a score of 100 an exceptionally high level. The final reading for the month comes out May 25.