US Consumer Sentiment Soars to Three-Year High in January

Jan. 16, 2004

WASHINGTON (AFP) - US consumers' spirits soared to the highest level in more than three years in early January, a survey by the University of Michigan showed.

A consumer sentiment index, based on the survey, surged to 103.2 points -- the highest since November 2000 -- from 92.6 points in late December, the university said Friday.

The leap surprised Wall Street economists, who had forecast a reading of 93.6 points.

Consumer sentiment is closely watched by the financial markets because it can affect consumer spending, which accounts for two-thirds of US economic activity.

American shoppers have proven during the past three years, however, that they can spend even when things look grim.

The two key components of the Michigan index improved. An index of people's feelings about current conditions rose to 108.9 from 97.0 in December. An expectations index rose to 99.5 from 89.8.

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