Consumer Sentiment Index Shows a Remarkable Increase

A preliminary report from the University of Michigan on Friday revealed that the Consumer Sentiment Index in the United States rose by 3.1% in December compared to the previous month, reaching 74.0. This marks a significant 6.2% increase on an annual basis.

The Current Economic Conditions Index experienced a substantial 21.6% jump in December compared to November, and a 6% rise compared to December 2023, amounting to 77.7 points. Meanwhile, the Index of Consumer Expectations saw a 6.9% monthly decline but a 6.2% annual increase, standing at 71.6.

Inflation Expectations also saw changes, with year-ahead inflation expectations rising from 2.6% last month to 2.9% this month, the highest reading in six months but still within the 2.3-3.0% range seen in the two years pre-pandemic. Long-run inflation expectations edged down from 3.2% last month to 3.1% this month, modestly elevated relative to the range of readings seen in the two years pre-pandemic.