U.S. consumer sentiment rose in October to its highest level since in more than seven years on growing optimism about the economy and more favorable personal financial expectations, a survey released on Friday showed.

The Thomson Reuters/University of Michigan's final October reading on the overall index on consumer sentiment finished at 86.9, the highest level since July 2007, up from 84.6 at the end of September.

The late October reading was up slightly from its initial figure of 86.4, which was also the expected reading of economists polled by Reuters.

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"The gains in confidence over the past three months point toward improved holiday spending by consumers," survey director Richard Curtin said in a statement.

"Overall, five years after the start of the recovery, consumers have finally begun to adopt the expectations and behaviors that have driven past expansions."

The survey's barometer of current economic conditions dipped to 98.3 from the 98.9 in September and was below the forecast of 98.9.

The survey's gauge of consumer expectations rose to 79.6 from the preliminary 78.4 reading and the 75.4 at the end of September, topping the expected 78.2.

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The survey's one-year inflation expectation fell to 2.9 from the 3 percent view in September, but ticked up from the 2.8 percent expectation in the preliminary reading. The survey's five-to-10-year inflation outlook held steady at 2.8 percent.