Consumer Sentiment Up for Fifth Straight Month in December
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U.S. consumer sentiment rose for a fifth month in December and views on inflation edged up.
The final December sentiment index increased to 74 from 71.8 last month, according to the University of Michigan. The median estimate in a Bloomberg survey of economists called for a reading of 74.2.
Consumers expect prices to rise at an annual rate of 2.8% over the next year, data Dec. 20 showed. And they saw costs rising at an annual rate of 3% over the next five to 10 years.
High prices have weighed on consumer sentiment for years now. And President-elect Donald Trump’s threats to boost tariffs and other proposed economic policies have added to the uncertainty around prices.
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“One reason for the elevated uncertainty is the dispersion in beliefs about the consequences of anticipated economic policy changes, ” Joanne Hsu, director of the survey, said in a statement. “December interviews revealed a surge in the share of consumers who believe that durables should be purchased now to avoid higher prices in the future, in part due to anticipated tariffs.”
The sentiment index continues to reflect an improving outlook among Republicans after November’s election, while Democrats grow more downbeat.
The Republican gauge of sentiment has risen to 85.4, while Democrats dropped to 69.6. This month saw a large jump in sentiment among political independents.
The current conditions gauge rose to the highest in eight months, while the expectations index fell from the previous month.
Consumers’ perception of their financial situation rose to a seven-month high in December.
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