The American shopper continues to grow more confident, both with the direction of the country's economy and their own financial standings. A new report from Thomson Reuters and the University of Michigan observed the consumer sentiment index at 79.3 in May, up from 76.4 the previous month.

The latest reading marks the highest the Index has been since 2007, before the economic crash. Half of respondents said the economy had improved over the past year, with many planning to spend more money on vehicles, household durables and other retail purchases.

"Unfortunately, consumer confidence is still extremely vulnerable to a reversal, as occurred in the past two years," survey director Richard Curtin said in a statement. "While their most optimistic expectation for job growth could go unfulfilled without much harm, if the recent slowdown in job growth persists in the months ahead, it could form the basis for a third retreat in confidence."

Many retail merchants are still concerned about the impact of rising gas and grocery costs, though, which they believe could temper retail purchases over the summer.

This entry was posted by Retail Pro on Tuesday, June 5th, 2012 at 9:48 am .