US consumer sentiment rises to 15-year high

WASHINGTON (Reuters) - U.S. consumer sentiment jumped to a 15-year high in early May amid growing confidence over the economy’s outlook, but much of the surge was recorded before an escalation in the trade war between the United States and China, which could hurt activity.

Economists have warned the bruising trade fight could weigh on consumer and business confidence, and undercut spending.

“While the ultimate response to tariffs is still unclear, the survey results suggest that consumer sentiment was upbeat before the developments on trade policy from the past couple of weeks.”

Still, some economists viewed the surge in sentiment, which also came despite higher gasoline prices, as a hopeful sign for a pickup in consumer spending after it slowed sharply in the first quarter.

Inflation measures have retreated, contributing to the U.S. central bank’s recent decision to suspend its three-year monetary policy tightening campaign.

A key inflation measure tracked by the Fed has slowed below its 2 percent target, prompting calls from Trump for the central bank to cut interest rates.

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