U.S. consumers ended May feeling the most upbeat about the economy since late 2007, according to data released Friday. Respondents are paying attention to jobs, not Greece.
The Thomson Reuters/University of Michigan consumer sentiment index increased to 79.3 in its final-May reading from 77.8 earlier in the month and 76.4 at the end of April, according to an economist who has seen the report.
Economists surveyed by Dow Jones Newswires had expected the final May index to be unchanged at 77.8.
The current conditions index was little changed at 87.2 from the preliminary reading of 87.3, while the expectations index increased to 74.3 from 71.7.
The report said the index has improved in each of the past nine monthly surveys. The May sentiment index is the highest since October 2007, before the last recession.
The expectations index is at its highest level since July 2007, and the current conditions index is the best since January 2008.
"Record numbers of consumers mentioned that they heard of favorable employment trends despite the jobs slowdown recently reported by the Labor Department," said the report. The next payroll report, for May, is scheduled to be reported June 1.
U.S. consumers aren't paying much attention to talk about Greece leaving the euro zone.
"One issue that only a few consumers even mentioned was the potential impact on the domestic economy from the European financial crisis," the report said.
With gasoline prices falling, consumers have lowered slightly their price expectations.
Within the Michigan survey, the one-year inflation expectations reading slowed to 3.0% in late May from 3.1% in early May and 3.2% in late April. The inflation expectations covering the next five to 10 years fell to 2.7% from 3.0% in early May.
Economists at Nomura Securities point out the Federal Reserve watches the longer-run inflation expectations data to gauge whether consumers are anticipating more or less inflation. They write the May slowdown "might give the Fed more leeway."
-By Kathleen Madigan, Dow Jones Newswires; 212-416-2466; firstname.lastname@example.org