PREVIEW-May prelim consumer sentiment seen up to 73.5

* WHAT: Thomson Reuters/University of Michigan’s Surveys of
Consumers preliminary reading on May consumer sentiment

* WHEN: Friday, May 14, at 9:55 a.m. (1355 GMT)

REUTERS FORECAST:

* Sentiment index is expected to rise to 73.5 from 72.2 in
April. Forecasts range from 70 to 80.

* Current economic conditions gauge is seen up at 81.9. It
ended April at 81.0. Forecasts range from 80.0 to 84.2.

* Barometer of consumer expectations is seen up at 67. It
ended April at 66.5. Forecasts range from 65 to 69.1.

FACTORS TO WATCH:

Sentiment fell in April from the month before, with
consumers viewing the economic recovery as under way but
painfully slow, thanks to high unemployment.

Government data earlier this month showed the nation’s
unemployment rate rose to 9.9 percent in April from 9.7
percent.

But the data also showed that employment grew at the
fastest pace in four years in April, which was seen as a bright
sign for the economic recovery and for consumer expectations.

“The reason I think sentiment will improve is because
economic numbers, most importantly the employment numbers, have
been improving. What tends to move in lock-step with the
sentiment number is the size of the work force,” said Hugh
Johnson, chief investment officer of Johnson Illington
Advisors.

But, “the most important part of the report is consumer
expectations…which helps to tell me what consumers may be
doing next month.”

The University of Michigan surveys’ barometer of consumer
expectations declined in April from March, and also fell short
of analyst expectations.

MARKET IMPACT:

A stronger-than-expected consumer sentiment number should
lift stocks, as it would brighten prospects for corporate
earnings.

An above-forecast sentiment number also should boost the
dollar against the yen and euro on expectations the Federal
Reserve would tighten monetary policy sooner rather than later,
while it would pressure bond prices.

Stock Investing
(Reporting by Caroline Valetkevitch, with additional
reporting by Ellen Freilich; Editing by Andrew Hay

PREVIEW-May prelim consumer sentiment seen up to 73.5