Consumer sentiment rose in December, boosted by improved views among lower-income consumers and increasing optimism for personal finances and business conditions.
The University of Michigan said Friday that its final December sentiment index climbed 1.9 points to 52.9.
“Consumer sentiment confirmed its early month reading, inching up less than two index points from November, within the margin of error. While lower-income consumers posted gains, sentiment for higher-income consumers was little changed. Buying conditions for durable goods fell for the fifth straight month, whereas expectations for personal finances and business conditions rose in December,” Joanne Hsu, director of the survey, said in a statement.
Consumers still say they are unhappy with current economic conditions. The barometer of current conditions slid to a record-low of 50.2, thirty percent lower than it was in January. The gauge of expectations, however, climbed to a four-month high.
Despite gloomy assessments of current conditions, U.S. consumers continue to spend at a robust pace. Total retail sales through October were up four percent from the period a year ago, according to data released by the government this week. Online sales are up 7.2 percent, and sales at restaurants are up 5.5 percent.
Consumers are less worried about inflation. According to the survey, consumer expectations for inflation in the year ahead fell for the fourth consecutive month to 4.2 percent. That’s down from 4.5 percent in November and the lowest reading since February. Over the next five to 10 years, they see prices rising 3.2 percent annually, also the fourth straight monthly decline and the lowest expected inflation since January.
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