Consumer Sentiment Falls 1.7% in Early December

Ann Arbor, MI, December 8, 2017-Consumer sentiment fell 1.7% in early December to 96.8, according to preliminary results form the University of Michigan.

This represents a 1.4% drop year over year.

“Consumer sentiment has remained quite favorable although it continued to slowly recede in early December from its October cyclical peak,” according to Survey of Consumers chief economist Richard Curtin. “Most of the recent decline was concentrated in the long-term prospects for the economy, while consumers thought current economic conditions have continued to improve. Importantly, the largest decline in long-term economic prospects was recorded among Democrats, which reflected their concerns about the impact of the proposed changes in taxes. Perhaps the most important changes in early December were higher income expectations as well as a higher expected inflation rate in 2018. Income gains have been slowly improving during the past year, and the data indicate that trend has continued. In contrast, the rise in inflation expectations in early December was a surprise, and confidence in this finding must await confirmation in the months ahead before any inferences are drawn. Buying plans for durables have improved in early December, largely due to attractive pricing, in contrast to the rise in the expected inflation rate. Overall, the data signal an expected gain of 2.7% in real consumption expenditures in 2018.”