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Consumer Sentiment Improves Slightly in December
According to the preliminary consumer sentiment survey from the University of Michigan two components of the survey saw improvement from November.
The Good News
From what we can tell here at Auto Credit Express, there was a little bit of good news (unlike the November report) coming out of the University of Michigan Survey of Consumers. The headline index rose to 59.1, up from November’s final report figure of 55.3. The economic conditions index also improved to 69.4 from November’s figure of 57.5. Finally, one-year inflation expectations for consumers fell to 1.7% from 2.9%, while the five-year inflation index fell from 3.1% to 2.9%. This means that most consumers are not expecting inflation to be a problem either in the short-term or the long-term.
The not so good news
Even though the overall index was up, this still puts the index only slightly above the level in October and more than ten points below the September level. And while the headline level is higher, only the drop in the inflation index caused this to happen.
The economic outlook dropped from 53.9 in November to 52.4. And even though the overall index is up, it continues to float just above the 28-year low recorded in June.
The Bottom Line
At this point in time, most consumers do not see inflation as a problem and this may be due to lower gasoline prices. But even though the survey demonstrates that current conditions may be improving, consumers’ expectations of the economy are on the decline, largely due to continued fears of the housing market as well as layoffs in pretty much all sectors of the economy. You also need to keep in mind that this is the preliminary report. The full report is scheduled to be released on Tuesday, December 23rd.
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