US consumer sentiment rose to an eight-month high in early February, boosted by recent tax cuts and optimism about the labour market, but consumers were less sanguine about the economy in the longer term.
Consumers expect to see improvement in the economy and job market this year, but the recovery was still anticipated to fall short and worries about inflation and its effect on wages weighed, according to the latest consumer surveys from Thomson Reuters and the University of Michigan.
Consumer confidence was also boosted by the recent package of tax cuts and improved personal finances.
The preliminary February reading for the overall index on consumer sentiment came in at 75.1, up from 74.2 in January.
It was the highest level since June 2010 and was roughly in-line with the median forecast of 75 expected by economists polled by Reuters.
"Further proof that the US economy is rebounding at a stronger pace than expected. It's been reflected in virtually all recent data outside of inflation data," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.
The survey's barometer of current economic conditions jumped to 86.8, the highest level since January 2008, while the gauge of consumer expectations slipped to 67.6 from January's 69.3. The survey showed the one-year inflation expectation was unchanged at 3.4 percent, the highest rate since the fall of 2008. The five-to-10-year inflation outlook also was unchanged at 2.9 percent.
The Federal Reserve Bank of Philadelphia's survey of 43 professional forecasters sees the economy growing at an annual rate of 3.6 percent in the current quarter, up from the estimate of 2.4 percent three months ago.
In another positive sign, a measure of future US economic growth rose to a 39-week high in the latest week, according to the Economic Cycle Research Institute, an independent forecasting group.
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