The final reading for the December Reuters/Michigan index of consumer
sentiment came in at 69.7 compared to the flash reading of 69.4 and the November
final reading of 61.3. This was the highest reading since July (71.6).
Economists had expected the indicator to stay unrevised at 69.4.
The details of the latest Surveys of Consumers of the University of
Michigan showed that the index of current economic conditions surged 7.3 per
cent m-o-m to 73.3 this month, while the index of consumer expectations soared
by 18.7 per cent m-o-m to 67.4.
The report also revealed that the year-ahead inflation expectations plunged from 4.5 per cent in November
to 3.1 per cent in December, in line with the preliminary estimates. This
was the lowest reading since March 2021 (3.1 per cent). Meanwhile, the 5-year
inflation expectations declined from 3.2 per cent in November to 2.9 per cent, compared to the preliminary estimate of 2.8 per cent.
This was the lowest reading in three months.
Commenting on the latest results, Joanne Hsu, Surveys of Consumers Director,
noted that the December 14 per cent increase in consumer sentiment reversed all
declines from the previous four months, primarily reflecting substantial improvements
in how consumers view the trajectory of inflation.