US consumer confidence hit four-year high in May, survey says


Edgar Hernandez purchases a Television during 'Black Friday' at a Best Buy store on November 25, 2011 San Diego, California. Thousands of consumers are queuing at various stores across the nation to take advantage of 'Black Friday' deals as the holiday shopping season begins in America.


Sandy Huffaker

US consumer confidence hit a four-year high in May as many Americans stayed optimistic about the job market despite Europe's economic troubles.

The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 79.3 from 76.4 in April, topping forecasts for 77.8 and an initial May reading of the same, Reuters reported.

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It was the highest level since October 2007 -- the precipice of the Great Recession.

"Europe is in recession and China is slowing....But the American consumer is unmoved. In fact, they are downright optimistic," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York, told the Los Angeles Times. "Consumer confidence at a new high should make us more certain that the consumer will continue to lead this recovery going forward."

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Half of all consumers in the survey said the economy had improved during the past year, while buying plans for vehicles and household durables also improved, Reuters reported.

Consumer confidence has been rising since August, when it bottomed out at 54.9 amid the contentious debate over raising the national debt ceiling. That figure was the lowest reading since 1980, according to the Los Angeles Times.

Survey director Richard Curtin warned that consumer confidence is still extremely vulnerable to a reversal, as has happened in the past two years.

"While their most optimistic expectation for job growth could go unfulfilled without much harm, if the recent slowdown in job growth persists in the months ahead, it could form the basis for a third retreat in confidence," he said in a statement, according to Business Insider.