Financial News: U.S. Consumer Sentiment Improves In Line With Preliminary

U.S. Consumer Sentiment Improves In Line With Preliminary Estimate In December

12/20/2024 - 10:15:00 (RTTNews)

(RTTNews) - The University of Michigan released a report on Friday showing consumer sentiment in the U.S. improved in line with its preliminary estimate in the month of December.

The report said the consumer sentiment index for December was unrevised from the preliminary estimate of 74.0, in line with economists' expectations.

The consumer sentiment index increased from 71.8 in November, reaching its highest level since hitting 77.2 in April.

"Consumer sentiment confirmed its early-month reading, rising for the fifth consecutive month and reaching its highest value since April 2024," said Surveys of Consumers Director Joanne Hsu.

She added, "Buying conditions exhibited a particularly strong 32% improvement, primarily due to a surge in consumers expecting future price increases for large purchases."

The monthly increase by the headline index came as the current economic conditions index surged to an eight-month high of 75.1 in December from 63.9 in November.

Meanwhile, the index of consumer expectations slid to 73.3 in December from 76.9 in November, falling to its lowest level since August.

"The expectations index continued the post-election re-calibration that began last month, climbing for Republicans and declining for Democrats in December," Hsu said.

The report also said year-ahead inflation expectations climbed to 2.8 percent in December from 2.6 percent in November, although that was slightly below the preliminary estimate of 2.9 percent.

Year-ahead inflation expectations saw the first month-over-month increase since May but remain within the 2.3-3.0 percent range seen in the two years pre-pandemic.

While long-run inflation expectations dipped to 3.0 percent in December from 3.2 percent in November, Hsu noted they remain modestly elevated relative to the range of readings seen in the two years pre-pandemic.

"Broadly speaking, consumers believe that the economy has improved considerably as inflation has slowed, but they do not feel that they are thriving; sentiment is currently about midway between the all-time low reached in June 2022 and pre-pandemic readings," said Hsu.

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