WASHINGTON (AP) — A better hiring outlook and lower gas prices pushed a measure of U.S. consumer confidence to its highest level in four and a half years.
The Thomson Reuters/University of Michigan index of consumer sentiment jumped to 79.3 in May, up from 76.4 in the previous month. That's the best reading since October 2007 — two months before the recession began.
A high proportion of consumers say they are hearing about job gains rather than losses. The number of those who say they heard of job losses dropped to its lowest point since mid-2007.
Gas prices have also fallen steadily in recent weeks, freeing up more money for other purchases. The average gas price Friday was $3.67 per gallon nationwide, according to AAA. That's down 17 cents in the past month.
American consumers appear to be more focused on the U.S. economy than on Europe's financial crisis, which has weighed heavily on stocks in May. The Dow Jones industrial average dropped another 75 points Friday to close at 12,455. The Dow has fallen 824 points this month since hitting a four-year high of 13,279 on May 1.
The survey found that "only a few consumers even mentioned" Europe.
The percentage of consumers who said it is a good time to buy an appliance or other long-lasting household good reached the highest point in a year.
Fears about rising prices are also abating, likely because of falling gas costs. Consumers expect lower levels of inflation in the months and years ahead, the survey found.
"This is a good report," said Yinbin Lei, an economist at IHS Global Insight, in a note to clients. "Consumer mood is slowly coming out of the ditch."
Still, consumers face plenty of challenges, Lei noted, such as weak wage growth, rising student loan debt, and a poor housing market.