Consumer sentiment climbed by far more than expected in early July to its highest in six months due to a surging stock market and reluctant acceptance of high gasoline prices, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its preliminary July consumer sentiment index came in at 92.4, well above a median forecast of 86.0 and June's final reading of 85.3, for the highest reading since January's 96.9.
Although the jump in the index was impressive, it was coming off a 10-month low in June.
"We're a bit surprised at the Michigan numbers, given where oil prices are and the problems in the housing sector. It perpetuates this on-again, off-again feeling about the U.S. economy," said Shaun Osborne, senior currency strategist at TD Securities in Toronto.
Reuters/University of Michigan Surveys of Consumers, in a statement, said: "Consumer confidence rose more than expected in early July due to a surging stock market, a reluctant acceptance of high gas prices and a slight improvement in expected trends in home prices."
The survey's gauge of current economic conditions was 105.7 in early July, above the final June reading of 101.9.
"Although gas prices have edged above $3 per gallon, consumers' complaints about high prices have decreased significantly, especially among higher-income households," Reuters/University of Michigan Surveys of Consumers said.
The preliminary June figure on consumer expectations was 83.9, above the final June figure of 74.7.
The survey's one-year inflation expectations index was 3.3 percent in early July from 3.4 percent in late June. The five-year to 10-year inflation expectations index rose to 3.1 percent in early July from 2.9 percent at the end of June.
The economic outlook for the next 12 months climbed to 110 from 94 in late June, while the economic outlook for the next five years rose to 104 in early July from 88 in late June.