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US consumer sentiment improves in December
By Michele Maatouk
Date: Friday 06 Dec 2019
LONDON (ShareCast) - (Sharecast News) - Consumer sentiment in the US improved in December, according to a preliminary reading from the University of Michigan.
The consumer sentiment index rose to 99.2 from 96.8 in November and 98.3 in December 2018. This was ahead of expectations for a reading of 97.0 and marked the best level since May.
Meanwhile, the current economic conditions index increased to 115.2 this month from 111.6 in November and 116.1 in December last year.
The index of consumer expectations printed at 88.9 compared to 87.3 last month and 87.0 in December 2018.
Surveys of Consumers chief economist, Richard Curtin, said nearly all of the gain early December gain was among upper income households, who also reported near-record gains in household wealth, largely due to increased stock prices.
"Indeed, among households with incomes in the top third of the distribution, their overall assessment of their current finances was the third highest in the past twenty years," he said. "These gains were aided by declining inflation expectations, with long term inflation expectations returning to an all-time low.
"While impeachment has dominated the media, virtually no consumer spontaneously mentioned impeachment in response to any question in early December - just 1%. Nonetheless, the data indicate the strong impact of partisanship on economic expectations, which has widened in the past few months."
Michael Pearce, senior US economist at Capital Economics, said: "The further rise in consumer confidence in early December, together with the apparent recovery in payroll growth in recent months, suggests that the prospects for consumption growth in 2020 are brightening. That adds to the broader evidence that the US economy is approaching a turning point.
"Overall, consumers heading into the Holiday season in high spirits is another reason for the Fed to remain firmly on the side-lines."