Consumer sentiment rose to 92.6 in December, up 1.3 points from the previous month according to the University of Michigan Consumer Sentiment Index. Confidence is now at the highest level since July.
“The December gain was largely due to lower inflation, which bolstered real incomes and brightened buying plans for household durables,” said Richard Curtin, Chief Economist for UM Surveys of Consumers. “Indeed there have been only three surveys in more than the past half century in which a higher proportion mentioned the availability of price discounts for durables.”
The Current Economic Conditions Index rose 3.8 points to 108.1, and was 3.3 points higher than it was a year ago. The Index of Consumer Expectations fell 0.2 points to 82.7.
“Given the weakness in the global economy and the strong dollar, discounting will continue unabated. As a result, the Fed policies will need to be much stronger to overcome the disinflationary psychology of consumers,” said Curtin.