Aug. 31, 2012 at 10:09 AM ET
Consumer sentiment climbed to a three-month high in August as households made progress paying down debt, but future expectations remained grim, a survey on Friday showed.
The Thomson Reuters/University of Michigan's final reading on overall consumer sentiment this month rose to 74.3, its highest since May and above economists' expectations of 73.6. In July, the number stood at 72.3.
Buying was bolstered by price discounts and low interest rates, the survey found. But the biggest source of optimism was tied to success in trimming debt.
"Rather than citing income changes, consumers were more likely to cite favorable shifts in the amount of their outstanding debt and the value of their assets," survey director Richard Curtin said in a statement.
The survey's barometer of current economic conditions rose to 88.7 from 82.7, the highest since January of 2008.
However, the survey's gauge of consumer expectations fell to 65.1 from 65.6, the lowest level since December of 2011.
Half of those surveyed said their financial situation was worse than it was five years ago and the majority anticipated no wage gains during the year ahead, the survey showed.
The one-year inflation expectation rose to 3.6 percent from 3 percent in July, while the survey's five-to-10-year inflation outlook was at 3 percent, compared with 2.7 percent last month.
Reuters contributed to this report.
More money and business news: