Consumer sentiment gains to four-month high in September

A shopper walks down an aisle in a newly opened Walmart Neighborhood Market in Chicago in this September 21, 2011 file photo.

NEW YORK (Reuters) - Consumer sentiment rose to its highest level in four months in September as Americans saw better prospects for the job market and economy, a survey released on Friday showed.

The Thomson Reuters/University of Michigan's final reading on consumer sentiment rose to 78.3 from 74.3 in August, the highest level since May.

Still, it was shy of economists' forecasts for 79, according to a Reuters poll, and gave up some of the advance seen in September's preliminary reading when the index climbed to 79.2.

Consumer expectations improved strongly, rising to 73.5 from 65.1, also the highest since May. More consumers expected the unemployment rate to fall than to rise, while twice as many survey respondents expected economic growth than those that anticipated a downturn.

Gains in home values and stock prices have also helped boost confidence and sentiment among households with incomes below $75,000 was at its highest level in five years.

But Americans' assessment of current economic conditions weakened to 85.7 from 88.7 amid concerns over their own finances. Twenty-nine percent said their financial situation had improved this month, down from 30 percent in August. In the year ahead, one-in-four households expected their finances to improve.

Consumers' inflation expectations for a year from now fell to 3.3 percent from 3.6 percent, while the five-to-10-year inflation outlook eased to 2.8 percent from 3 percent.

(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)