Spring Fever - Consumers Get Upbeat

The University of Michigan's final March index of consumer sentiment read 88.9, up from the final February figure of 86.7, said sources who saw the subscription-only report.

The median forecast of Wall Street economists polled by Reuters was 87.0.

The survey's index of current conditions rose to 109.1 in March from 105.6 in February. Economists had forecast a 106.2 reading.

The gauge on consumer expectations rose to 76.0 in March from the final February reading of 74.5. Economists had expected a reading of 74.8.

Other readings of consumer confidence have been strong this week. The Conference Board reported an unexpected jump in its U.S. consumer confidence index to 107.2 in March from an upwardly revised 102.7 in February, well above forecasts. Also, ABC News and the Washington Post said their Consumer Comfort Index edged up to minus-seven in the latest week, the highest in 15 months, from minus-eight the previous week.

"With energy prices at least roughly flattening out, and with the labor market continuing to strengthen, those are probably two of the main reasons people are starting to get more optimistic," said Patrick Fearon, senior economist at A.G. Edwards & Sons.

U.S. employers added a stronger-than-forecasted 243,000 jobs in February, and average hourly pay was 3.5 percent higher, the biggest annual increase since 2001, according to a Labor Department report earlier this month.

On Thursday, the U.S. Labor Department said new claims for U.S. jobless benefits fell by 10,000 to 302,000 last week, suggesting continued health in the labor market.

"The labor market has been strengthening for a while, but it may be that people are finally starting to become believers in it," said Fearon.

Confidence measures are often used as a gauge of future spending patterns. Consumer spending comprises roughly two-thirds of overall U.S. economic activity and is seen as an indication of strength or weakness in economic growth.