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.
