Consumer sentiment in the U.S. in early May climbed to its highest level in 15 years, rebounding after a month-over-month decline in the prior month, preliminary results from the University of Michigan's latest survey showed.
The index of consumer sentiment came in at 102.4 in May, rising from 97.2 in the prior month and 98.0 recorded in the same period last year. The latest reading surpassed the Econoday consensus forecast of 97.5.
The 15-year high was attributed to the rise in the index of consumer expectations, which came in at 96.0 from April's 87.4. This reflected consumers' favorable outlook on prospects for the overall economy in the shorter and longer term.
Meanwhile, the current economic conditions index edged up to 112.4 from 112.3.
The increases were recorded prior to the collapse of the U.S.-China trade talks as both countries slapped tariffs on each other. Negative references to the tariffs increased in early May and is expected to increase further in late May and June, according to the survey.
"Those who held negative views about the impact of tariffs on the economy and pricing had values on the Expectations Index that were 25 points lower, and expected the year-ahead inflation rate to be 0.6 percentage points higher," wrote Richard Curtin, the survey's chief economist.
Survey data noted moderate spending growth in the remainder of 2019, but analysts warned against the adverse effects of rising trade tensions, which are expected to weigh on consumer confidence and spending.