Consumer sentiment as measured by the University of Michigan/Thomson Reuters index jumped from a weak 76.4 reading in April to a more robust 83.7 in May. Economists had expected a reading of 78 following the surprise drop in April from a 78.6 in March.
The leading indicators index from the Conference Board also posted a higher-than-expected rise this morning, from a decline of 0.1 in March to a 0.6 point boost to 95 in April. The consensus estimate called for a 0.3 April rise.
New housing permits and the interest rate spread get most of the credit for the rise in the leading indicators, even though the outlook from consumers remains weak. An economist at the Conference Board said:
The index is 3.5 percent higher (annualized) than six months ago, suggesting expansion. However, the biggest risk right now is the adverse impact of cuts in federal spending. The biggest positive…
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