Consumer Sentiment Rose 5.1% to 59.7 in December

Ann Arbor, MI, December 23, 2022-Consumer sentiment rose 5.1% to 59.7 in December, according to final results from the University of Michigan Survey of Consumers.

This represents a 15.4% decline year over year.

“Consumer sentiment confirmed the preliminary reading earlier this month, rising 5% above November,” says Survey of Consumers director, Joanne Hsu. “Sentiment remains relatively downbeat at 15% below a year ago, but consumers’ extremely negative attitudes have softened this month on the basis of easing pressures from inflation. One-year business conditions surged 25%, and the long-term outlook improved a more modest but still sizable 9%. Still, both measures are well below 2021 readings. Assessments of personal finances, both current and future, are essentially unchanged from November. 

“Year-ahead inflation expectations improved considerably but remained elevated, falling from 4.9% in November to 4.4% in December, the lowest reading in 18 months but still well above two years ago. Declines in short-run inflation expectations were visible across the distribution of age, income, education, as well as political party identification. At 2.9%, long run inflation expectations have stayed within the narrow, albeit elevated, 2.9-3.1% range for 16 of the last 17 months. While the sizable decline in short-run inflation expectations may be welcome news, consumers continued to exhibit substantial uncertainty over the future path of prices.”