According to the final survey released by the University of Michigan on Friday (23), the consumer confidence index rose to 59.7 in December, slightly higher than the initial value of 59.1 and 56.8 the previous month. It is worth noting that consumers’ inflation expectations for next year fell to 4.4% from their previous value of 4.9%, the lowest since June 2021.
December’s final consumer confidence index rose to 59.7, higher than the 59.1 expected by economists, according to the University of Michigan survey. In addition, five-year inflation expectations fell from the initial value of 3% to 2.9%. The proportion of consumers whose standard of living is impacted by inflation fell slightly in December but remained above 40% for the seventh consecutive month, the survey said.
Separately, the Current Conditions Index, which measures current conditions, fell slightly to 59.4 from 60.2 previously, although still above its November level, while the Expectations Index, which measures current futures, rose to 59.9 from an initial reading of 58.4.
Joanne Hsu, director of the University of Michigan consumer confidence survey, said consumers can agree that inflation has slowed from its level in recent months, but there is considerable uncertainty about the magnitude and speed of inflation decline. Furthermore, household purchases of durable goods remained stable in the final report compared to the initial survey, with consumers noting the negative impact of higher interest rates on car and house purchases.
When it comes to employment, the University of Michigan survey shows that people’s concerns about unemployment are on the rise: About 45% of consumers expect the unemployment rate to rise in the next year, which is the highest percentage since April 2020.
Recent consumer price data suggests that while US inflation remains high, the worst may be over. US gasoline prices, for example, have fallen steadily since early November, giving consumers some breathing space amid prevailing price pressures.
However, the road to the Federal Reserve’s (Fed) 2% inflation target could be long and painful, with many observers predicting a recession in the US next year, with new data on Friday showing the preferred by the Fed. Inflation indicators slowed last month, while consumer spending stagnates.
