University of Michigan consumer sentiment ticks higher in December

The University of Michigan index of consumer sentiment rose to 91.8 in the preliminary December estimate, coming in above our expectations for a decline (90.5) but below consensus expectations of 92.0. The current conditions index rose to 107.0 (previous: 104.3) and consumer expectations ticked lower to 82.0 (previous: 82.9). Both current (112, previous: 111) and expected (124, previous: 122) personal finances improved in early December.

On the economic outlook, a modest improvement in the five-year horizon (106, previous: 105) was not enough to offset a slump in the 12-month outlook (99, previous: 106). Purchasing sentiment for major household items surged to the highest level since 2005 (166, previous: 160), while vehicle-buying (138, previous: 147) and home selling sentiment (105, previous: 117) both moved lower.

"Elsewhere, year-ahead inflation expectations decline one-tenth to 2.6% and longer-term expectations were unchanged at the same level. On balance, consumer sentiment remains on a solid trajectory, in line with the improvement in consumer spending", says Barclays.