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U.S. consumer sentiment jumps to highest in five years

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NEW YORK, Oct 12 (Reuters) - U.S. consumer sentimentunexpectedly rose in October to its highest level in five yearsas optimism about the overall economy improved, a surveyreleased on Friday showed.

The Thomson Reuters/University of Michigan's preliminaryOctober reading on the overall index on consumer sentiment camein at 83.1, up from 78.3 the month before, marking the highestlevel since September 2007.

The reading was well above the median forecast for a slightdecline to 78 among economists polled by Reuters.

"What changed was how (consumers) evaluated economicconditions," survey director Richard Curtin said in a statement."Economic conditions during the year ahead were expected to be'good' by more consumers, and more consumers expected 'good'economic times over the next five years."

The survey's barometer of current economic conditions roseto 88.6 from 85.7 and was above a forecast of 86.

The survey's gauge of consumer expectations jumped to 79.5from 73.5, above an expected reading of 74. Expectations were attheir highest since July 2007.

The survey's one-year inflation expectation fell to 3.1percent from 3.3 percent, while the survey's five-to-10-yearinflation outlook fell to 2.6 percent from 2.8 percent, itslowest since March 2009.

(Reporting by Edward Krudy; Editing by Leslie Adler)

((edward.krudy@thomsonreuters.com)(646 223 6314)(ReutersMessaging: edward.krudy.thomsonreuters.com@reuters.net))

Keywords: USA ECONOMY/SENTIMENT