Americans are getting more optimistic about the economy

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  • Consumer sentiment rose more than expected to 97.8 in
    the first half of March.
  • Increasing optimism was concentrated among lower- and
    middle-class households.
  • The gains come after disappointing sentiment readings
    at the beginning of 2019. 

Public confidence in the economy rose more than expected in the
US in early March, particularly among lower- and middle-class
households.  

Consumer sentiment rose 4.3% from a month earlier to 97.8,
preliminary results from the University of Michigan’s monthly
survey showed Friday,
compared with economist expectations for a 95.6 reading. Final
results are scheduled to be released at the end of the month.

Lower- and middle-class Americans were more optimistic toward
income potential, pulling the index higher. Overall sentiment
jumped among households with incomes in the bottom two-thirds of
the distribution, while the top income bracket’s confidence in the
economy rose at a much slower pace.

“Since households with incomes in the top third account for more
than half of all consumer expenditures, cautious observers will
conclude that the latest data are another indication that the end
of the expansion is on the distant horizon,” said Richard Curtain,
the survey’s chief economist.

All income groups were more positive about growth prospects for
the overall economy — a rebound following weaker-than-expected
consumer sentiment reports in recent months.

Financial-market turmoil at the end of 2018, fading stimulus,
and the partial government shutdown that ended in January have
weighed on outlooks toward the economy. Sentiment in February made
a modest recovery after falling to its lowest level since October
2016 a month earlier.

But consumers appear to have shaken off some of these strains,
according to Ian Shepherdson, chief economist at Pantheon
Macroeconomics, with expectations for the future rising to just off
the September high.

“This matters, because it strongly supports our view that the
slowing in consumption in recent months is more likely to be a
transition to a sustainable pace, as the kick from tax cuts and
lower gas prices fades, rather than the start of a sustained
downtrend, ultimately leading to the end of the cycle,” he
said.

On Tuesday, data showed optimism among small businesses rebounded
last month after also falling to a more than two-year low. 

“Small business owners are thankful to have the government
shutdown in the rear view mirror but need more certainty about the
future,” said Juanita Duggan, NFIB president and CEO.

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Source: FS – All – Economy – News
Americans are getting more optimistic about the economy