Consumers Pessimistic, But Sentiment Improves

Ann Arbor, MI, Dec. 23, 2008--The Reuters/University of Michigan survey of consumers rose to 60.1, better than a preliminary reading of 59.1 released earlier this month and topping the 58.5 reading forecast by economists.

It also marked a sharp improvement from November's 55.3 reading, a 28-year low.
 
Consumers reported that lower prices provided some needed relief, but continued job losses as well as income declines kept them pessimistic about their future economic prospects, the survey said.

A record number of consumers reported price discounts on household durable goods and vehicles. And, one out of every four consumers surveyed expected outright declines in the overall price level - more than any time since the 1950s.
 
Despite improvement in December, the recent steep declines in confidence mean consumer spending should still tumble 1% next year, said survey director Richard Curtin, "followed by an unusually slow recovery in 2010."

The index has tumbled 20% from last year and 38% from a peak reached in Jan. 2007.