(Reuters) – U.S. consumer sentiment rose in January to its highest level in 11 years on better job and wage prospects, a survey released on Friday showed.
The Thomson Reuters/University of Michigan’s final January reading on the overall index on consumer sentiment came in at 98.1, its best showing on a final basis since January 2004 and the latest in a string of increases since August.
The reading was up from 93.6 the month before but slightly under the preliminary reading of 98.2, which was also the median forecast of among economists polled by Reuters.
“Consumers judged prospects for the national economy as the best in a decade, with half of all consumers expecting the economic expansion will continue for another five years,” said Richard Curtin, the survey’s director.
“While renewed strength in consumer spending will boost the pace of economic growth in 2015, most consumers are counting only on modest income gains during the years ahead. Without sufficient wage gains, consumers will be forced to demand large price discounts to complete their purchases, adding to disinflationary pressures.”
The survey’s barometer of current economic conditions rose to 109.3 from 104.8 in December, versus a forecast of 108 and a preliminary read of 108.3.
The survey’s gauge of consumer expectations climbed to 91 from December’s reading of 86.4, though it was below the preliminary January of 91.6. Analysts were looking for a reading of 91.5.
The survey’s one-year inflation expectation was 2.5 percent, compared with 2.8 percent in December.