USA Consumer Sentiment At 3-Month High, Pessimism Persists

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USA Consumer Sentiment: Thomson Reuters / University of Michigan

Confidence Posts Slight Gain

(Reuters) - Consumer sentiment hit a three-month high in August as households chipped away at outstanding debt, though Americans were pessimistic about the future.

The survey's barometer of current economic conditions rose to 88.7 from 82.7, the highest since January of 2008.

However, the survey's gauge of consumer expectations fell to 65.1 from 65.6, the lowest level since December of 2001. Half of those questioned said their financial situation was worse than it was five years ago and the majority anticipated no wage gains during the year ahead, the survey showed.

"Despite the August gain, confidence has been in a holding pattern during the past few months. Aside from the past few years, the average level of consumer confidence in 2012 was lower than in any other year since 1982. Currently, a major source of uncertainty is about when the fiscal cliff will be bridged, and who will bear the burden of the tax increases and the spending cutbacks. This uncertainty will increasingly cause consumers to become more cautious spenders. While some worry about the negative impact on spending from upper income consumers, the spending of every worker is threatened by the end of the payroll tax cuts in January," survey director Richard Curtin said in a statement.

USA Consumer Sentiment by Month

USA Consumer Sentiment by Year

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