Consumer sentiment rose in May to its highest level since October 2007, despite a tough month on Wall Street and worsening conditions in Europe.
The Thomson Reuters/University of Michigan index climbed to 79.3 in its final May reading, up from a midmonth tally of 77.8 and April’s score of 76.4.
May’s consumer sentiment index beat out February 2011’s score of 77.5, the previous post-recession high in a month-end reading. It also topped analysts’ expectation of 77.8 according to Econoday.
The index surveys households each month on economic conditions, with a score of 100 considered an exceptionally high level.
Countries in the eurozone are struggling under the weight of austerity packages. Industrial output in stronger countries slowed the last quarter, dimming the ability to bolster weaker economies in the eurozone. Talk of Greece exiting the Euro increased in May, adding to volatility.
On Wall Street, major stock indices are all down. Dow Jones and Standard & Poor's are down 5% this month. Nasdaq is also down nearly 7% for May.
Gas prices, however, loosened their grip on U.S. consumers' wallets this month. The natonal average was at $3.67 a gallon Friday, down from $3.84 a month earlier, according to AAA.
Conditions also improved on the jobs front, according to survey respondents, as fewer people said they heard about job losses in May than anytime since mid-2007. Richard Curtin, director of the survey, said that could either mean more positive employment reports are on the way from the government, or consumers are a bit too optimistic.
"The most likely prospect is that job growth resumes at a modest pace and that confidence remains largely unchanged until after the November election and decisions about tax policy are made," Curtin said in a news release.