US economy: Consumer sentiment improves a little

In an economy where progress seems to be agonizingly slow, the US consumer has just taken another small step.

Consumer sentiment rose to 70.2, the highest index reading since June, the Reuters/University of Michigan Surveys of Consumers reported Friday. That exceeded economists' median expectation and, essentially, returns the index to where it stood a year ago, just before the panic of the Sept. 15 Lehman Brothers collapse.

The index – a measure of shoppers' confidence – still signals considerable wariness, however, which means that consumers probably aren't going to boost spending soon. That, in turn, suggests that any recovery will probably proceed at a molasses pace, because consumer spending plays such an important role in the US economy.

"Confidence remains well below both its peak and the long-term average of 86.7," writes Paul Dales, an economist with Capital Economics, in an analysis. "The continued weakness of confidence supports our view that after a short-term burst, growth will fall back in the second half of 2010 as consumption remains weak."
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