Consumer sentiment at 5-year high, inventories jump NEW YORK (Reuters) - Americans' perceptions of the outlook for the economy and for employment improved in early November with consumer sentiment rising to its highest level in more than five years, a survey released on Friday showed. It was the fourth month in a row consumers' moods have improved. Separate data showed wholesale inventories rose in September by the most in nine months as wholesalers sharply boosted stocks of farm goods and oil, the latest sign the economy grew more than initially estimated in the third quarter. The Thomson Reuters/University of Michigan preliminary reading on the overall index on consumer sentiment rose to 84.9 from 82.6 in October, topping economists' expectations for 83. It was the highest level since July 2007. The measure of consumer expectations also hit a more than five-year high, rising to 80.8 from 79.0. Most interviews for the survey were done before the presidential election earlier this week. The impact of the election should not have an impact on overall expectations, but the so-called "fiscal cliff" of impending tax rises and government spending cuts could be a shock to consumers if it is not quickly avoided, survey director Richard Curtin said. "It shows that the U.S. economy is on a decent footing heading into the so-called fiscal cliff," said Joe Manimbo, market analyst at Western Union Business Solutions in Washington. There's a lot at stake, and there's a lot momentum that could be lost if lawmakers don't get their act together. The automatic spending cuts and significant tax increases set to come into effect in January could take an estimated $600 billion out of the economy and push it into recession, according to the non-partisan Congressional Budget Office's assessment of the fiscal cliff. The chances of a comprehensive legislative solution before January 1 are considered slight and members of Congress have been looking for some temporary fix to buy time once a new Congress and re-elected president are sworn-in in January. "Unless the Congressional Grinch steals Christmas, prospects for the holiday shopping season have improved markedly," said Curtin. The consumer sentiment survey is now consistent with a gain in consumer spending of 2.5 percent next year, the report said. U.S. stocks recovered slightly edged higher after the data following two days of falls. Total wholesale inventories gained 1.1 percent to $494.2 billion, beating even the highest estimate in a Reuters poll of analysts. Inventories are a key element in the government's measure of changes in gross domestic product and can highlight underlying strength or weakness in U.S. growth. Banking group Barclays raised its estimate for third quarter gross domestic product growth to 3.2 percent from 2.8 percent following the report. The first reading of growth for the third quarter showed the economy expanded at a 2.0 percent rate, though other recent economic reports, including data on trade and factory orders, have already suggested a faster pace of growth than first estimated. Still, other economists cut their expectations for growth in the fourth quarter, according to a separate survey released on Friday. Economists expect the economy to grow at an annual rate of 1.8 percent in the current quarter, down from the previous estimate of 2.2 percent growth, according to the Philadelphia Federal Reserve's fourth-quarter survey of 39 forecasters. Reporting by Leah Schnurr and Edward Krudy in New York, Jason Lange in Washington