WASHINGTON -- Despite dark clouds in the global and U.S. economies, American consumers are feeling more upbeat than they have at any time since the fall of 2007.
That is according to an unexpectedly strong reading of consumer sentiment from the University of Michigan and Thomson Reuters, released Friday. The report suggests the holiday shopping season could turn out stronger than forecast.
The widely followed index jumped to 83.1 in October -- nearly a five-point gain from the previous month and the highest since September 2007.
Measures of both components of the index -- people‚??s assessment of their current financial conditions and future expectations -- went up over the month. Sentiment improved for families making more than $75,000, as well as those making less.
Most analysts had forecast a slight drop in consumer confidence this month, given persistent sluggish growth at home and increasing worries about a global slowdown.
Hiring continues to be slow, gas prices remain high, and businesses and many others are concerned about looming tax increases and fiscal spending cuts set to take effect in January.
But consumers seem to be wearing these troubles like a light sweater.
The Michigan survey is the third economic report in a week to show a post-recession best.
‚??On the whole, this is a very encouraging report, especially given that the gains were spread out across components of the index, income groups and geographies,‚?Ě economists at Barclays Bank wrote after the consumer survey‚??s release.
Other economists were more cautious.