U.S. Consumer Sentiment Jumps In December As Inflation Expectations Tumble
(RTTNews) - A report released by the University of Michigan on Friday showed a significantly bigger than expected improvement in U.S. consumer sentiment in the month of December.
The University of Michigan said its consumer sentiment index surged to 69.4 in December from 61.3 in November. Economists had expected the index to inch up to 62.0.
"Consumer sentiment soared 13% in December, erasing all declines from the previous four months, primarily on the basis of improvements in the expected trajectory of inflation," said Surveys of Consumers Director Joanne Hsu.
She added, "Sentiment is now about 39% above the all-time low measured in June of 2022 but still well below pre-pandemic levels."
The jump by the headline index came as current economic conditions index shot up to 74.0 in December from 68.3 in November, while the index of consumer expectations spiked to 66.4 from 56.8.
The report also showed a sharp pullback in year-ahead inflation expectations, which plunged to 3.1 percent in December from 4.5 percent in November.
Year-ahead inflation expectations are now at their lowest level since March 2021 and sit just above the 2.3-3.0 percent range seen in the two years prior to the pandemic.
Long-run inflation expectations also fell to 2.8 percent in December from 3.2 percent in November, matching the second lowest reading seen since July 2021.
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