A report from the University of Michigan revealed on Friday the preliminary reading for the Reuters/Michigan index of consumer sentiment increased 1.9 percent m-o-m to 86.5 in early April. This was the highest reading since March 2020.

Economists had expected the index would increase to 89.6 this month from March’s final reading of 84.9.

According to the report, the index of current U.S. economic conditions surged 4.5 percent m-o-m to 97.2 in April from 93.0 in the previous month. Meanwhile, the index of consumer expectations remained unchanged m-o-m at 79.7.

“Consumers in early April reported surging economic growth and strong job gains due to record stimulus spending, low-interest rates, and the positive impact of vaccinations,” noted Surveys of Consumers chief economist, Richard Curtin. “The strength in current economic conditions reflects much larger than usual stimulus payments during the past year, and much larger than usual economic gains due to comparisons with last year's shutdowns. Other factors suppressed the pace of expected gains, including persistent concerns with vaccine safety as well as a surge in year-ahead inflation expectations to 3.7%, the highest level in nearly a decade,” he added.