U.S. consumer sentiment improved in May as job gains offset high gasoline prices, while inflation expectations diminished, a survey released Friday showed.

Consumers were also more upbeat about the longer term outlook for the economy, the Thomson Reuters/University of Michigan survey showed. Even so, income expectations remained at low levels.

The final reading on the overall index on consumer sentiment was 74.3, up from 69.8 the month before and higher than the preliminary reading of 72.4.

Economists polled by Reuters had expected the index to be unchanged from the preliminary figure.

"Sagging real incomes have made consumers more cautious spenders, with rising gas prices especially troublesome for younger and lower income households," Richard Curtin, director of the survey, said in a statement.

"The data continue to indicate the maintenance of a moderate pace of consumer spending during the balance of 2011."

The survey's gauge of consumer expectations jumped to 69.5 from April's 61.6. It also came in above a predicted reading of 67.5.

The survey's barometer of current economic conditions was 81.9, slipping from April's 82.5 but topping forecasts of 80.2.

The survey's one-year inflation expectation fell to 4.1 percent from 4.6 percent, its first decline since September 2010. The survey's five-to-10-year inflation outlook held steady at 2.9 percent.