NEW YORK (CNN/Money) - A closely watched measure of consumer confidence in the United States rose in May, a published report said Friday, but was revised down from an earlier reading and was slightly worse than analysts expected.
The University of Michigan's consumer sentiment index rose to 92.1 from 86.0 in April, according to market sources quoted by Reuters. Economists, on average, expected a reading of 92.6, according to Reuters. The university's initial reading on May sentiment, released earlier this month, was 93.2.
The expectations component of the index, which measures how consumers think the economy will perform in the next 12 months, jumped to 91.4 from 79.3, Reuters said. The current conditions index dropped to 93.2 from 96.4.
The report had little impact on U.S. stock prices, which continued to rise in early trading. Treasury bond prices also rose.
Wall Street pays close attention to consumers, whose spending makes up more than two-thirds of all U.S. economic activity.
Earlier Friday, the Commerce Department said consumers spending fell a bit in April, as incomes were flat.
Economists weren't surprised by April's weakness, which followed a big pop in spending and income in March. And other measures of consumer sentiment, including the Conference Board's monthly confidence index and ABC News/Money magazine's weekly sentiment survey, have shown consumer attitudes improving in the weeks and months following the U.S.-led war with Iraq.
But consumer sentiment jumped after the Gulf War in 1991, as well, only to wilt again when the labor market failed to improve for several months following the 1990-91 recession.
Some economists worry consumers are facing a similar problem in 2003 -- though non-farm payrolls are 2.1 million jobs thinner than they were in March 2001, when most economists think a recession began, businesses have shown no desire to hire new workers, and few economists think such a hiring splurge is coming any time soon.
To keep consumers spending, the Federal Reserve has slashed its target for a key short-term interest rate to 41-year lows, and will likely keep rates low for a long time.
Some economists think the Fed might even have to cut again at its next policy meeting, scheduled for June 24 and 25, particularly if labor-market weakness continues, putting downward pressure on wage growth and discouraging consumer spending.
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