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Thursday, December 22, 2011

Consumer Sentiment Rose in December

Consumer sentiment rose by 5.8 points in December to 69.9 according to the University of Michigan Consumer Sentiment Index. The larger than expected rise was due to improvement in both the current conditions and future expectations portions of the index.


The rise in the index was driven by the improving future expectations, rising from 55.4 to 63.6. Present conditions also added to the improvement, rising from 77.6 to 79.6.

The report indicated that inflationary expectations are little changed from November, calling for 3.1% inflation over the next year and 3.5% over the next 5 years.

Consumer sentiment has risen 25% since its near historic low of 55.7 seen in August. This low matched recessionary lows and was one of the lowest readings ever. Despite the improvement, consumer sentiment levels remain below levels seen at the beginning of the year.

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