The preliminary consumer sentiment survey from Reuters & the University of Michigan soared over 10 points to 73.1 from last month's 63.0 reading. Also, one-year inflation expectations moved down dramatically to 3.6% from August's 4.8% forecast, the biggest monthly drop in nearly three years.

The consensus was for the survey to improve just a single point to 64.0.

The economic conditions index moved up to 76.5 from the prior month's 71.0 while the economic outlook index moved up to 70.0 from August's 57.9 reading.

Five-year inflation expectations fell to 2.9%, down from 3.2% last month and down half a percentage point from the cyclical peak of 3.4% seen in both May and June.

The major improvement contrasts with the the weekly survey of consumer comfort from ABC News. The survey remained to -47 last Tuesday, just four points away from its record low.

The Michigan sentiment survey is the first major look at consumer confidence for September.

By Patrick McGee and edited by Nancy Girgis
©CEP News Ltd. 2008