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NEW YORK - U.S. consumers felt their most upbeat in a year in January, the University of Michigan's index of consumer sentiment showed today.
The index surged for a fourth straight month to 94.2 in early January from 88.8 in December, beating consensus forecasts. The index hit its highest level since January 2001 and is up more than 12 points from a post-Sept. 11 low, Reuters reports.
Analysts told Reuters the report was the latest confirmation that consumers, aided by 4.75 percentage points of Federal Reserve interest rate cuts in a year, have withstood the worst of the current downturn and are feeling better about the future.
"The reason the mood is changing is partly in response to the Fed's aggressive action, which is supporting optimism. And people can see the economy seems to be doing a lot better than many people feared," said James Glassman, senior economist at J.P. Morgan Chase in New York.
The preliminary consumer sentiment survey is based on telephone interviews with roughly 250 Americans across the country on personal finances, business conditions and buying conditions. It is revised with a total of 500 interviews at the end of the month.