NEW YORK - U.S. consumer sentiment edged up in May, but not as much as expected, although a better outlook for jobs and the economy offset worries over high oil prices and unrest in Iraq, a report showed on Tuesday.
The Conference Board, a private forecasting body, said its index of consumer confidence rose to 93.2 in May from a revised 93.0 in April. Analysts polled by Reuters had expected a reading of 93.50.
"The recent upturn in the present situation index is being spurred by strong employment gains in March and April," said Lynn Franco, director of the Board's consumer research center, in a statement.
"This has made consumers more positive about short-term prospects in the months ahead. The pick-up in the job market is offsetting the impact of rising gas prices and escalating tensions overseas," she said.
After two straight months of robust increases in non-farm payrolls, the Conference Board's jobs-hard-to-get index still rose to 30.6 percent from a revised 28.0 in April, but the number of consumers saying jobs were plentiful rose to 16.6 percent from a revised 15.6.
Also the number of consumers who felt there would be more jobs in six months' time rose to 19.2 percent in May from 18.3 in April.
Record high oil prices have fueled concern that inflation could take off sharply as the cost of gasoline rises, as well as stunting U.S. economic growth.
The present situation index was largely steady at 90.3 against 90.4 in April, while the expectations component rose to 95.2 from 94.8.
Some economists had feared that the scandal over prisoner abuse at the hands of U.S. soldiers in Iraq and the subsequent backlash could weigh on confidence, but this turned out not to be the case.
"The confidence index improved a bit, it could have been stronger. But given the strong cross-currents buffeting consumers it might well have fallen," said Pierre Ellis, senior international economist at Decision Economics.
"Between the brightening outlook for the domestic economy on the positive side and the sharply negative confidence elements from the Mid-East, this net improvement is really a good performance," he added.
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