US consumer index hits 8-month high

The United States consumer sentiment continued to bounce back, hitting an eight-month high of 75.1 percent as the labor market continue to recover from the blows of the global financial crisis, survey showed on Friday.

A new survey data released on Friday showed a significant increase in U.S. consumer sentiment, hitting an eight-month high on top of positive labor market and recent tax cuts by the Obama administration.

According to the survey conducted by the University of Michigan and Thomson Reuters, majority of Americans are expecting improvement in the US economy, particularly in the job sector, despite fears over possible inflation brought by the widening trade deficit.

The survey showed that US consumer confidence hit 75.1 percent from 74.2 percent in January –the highest level since June 2010 – as recent tax cut packages and improved personal finance began to take effect.

Michael Woolfolk, a senior currency strategist at the New York-based BNY Mellon, said that the strong consumer index only showed that the US economy is now bouncing back at a stronger-than-expected rate.

“It’s been reflected in virtually all recent data outside of inflation data,” said Woolfolk.

Meanwhile, the survey also showed that around 86.8 percent of Americans believe that economic conditions in the country will continue to improve – it was the highest level since January 2008.

On the other hand, consumer expectations dropped to 67.6 percent in February from 69.3 percent in the previous month.

According to Omair Sharif of the RBS, consumers are becoming more optimistic in the current economic conditions, but warned that a stretched optimism beyond the immediate future remained to be uncertain.

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