Consumer sentiment rose in December, reaching the highest point since April but remaining below its pre-pandemic level.
The increase in the consumer sentiment index marked the fifth consecutive month of increases, according to final results from the University of Michigan Surveys of Consumers for December.
Consumer sentiment was up 3.1% from the previous month and up 6.2% from December 2023, according to a Friday (Dec. 20) press release.
“Broadly speaking, consumers believe that the economy has improved considerably as inflation has slowed, but they do not feel that they are thriving; sentiment is currently about midway between the all-time low reached in June 2022 and pre-pandemic readings,” Joanne Hsu, director of the Surveys of Consumers, said in the release.
The index of consumer sentiment reading of 74 was lower than the median estimate of 74.2 forecast in a survey of economists, Bloomberg reported Friday.
The Bureau of Economic Analysis said Thursday (Dec. 19) that its third and final revision of how the economy fared in the third quarter showed healthy GDP growth at a 3.1% annualized pace.
GDP was better than expected, and it’s almost always the case that GDP’s direction rests firmly on the shoulders of U.S. consumers’ spending, which accounts for roughly 70% of the figure, PYMNTS reported Thursday.
Consumer spending, as measured in the personal consumption expenditures index, was up 3.7%, annualized.
Workers in a variety of fields feel more optimistic than average, according to the December edition of the PYMNTS Intelligence report “New Reality Check: The Paycheck-to-Paycheck Report.”
The report found that more than one-third of working consumers believe they have better opportunities for career advancement now than in recent years, although paycheck-to-paycheck workers are less likely to share that optimism.
The Surveys of Consumers released Friday by the University of Michigan also found that the index of consumer expectations continued a post-election recalibration in which Republicans’ expectations climbed in December while Democrats’ expectations declined, according to the press release.
“Importantly, for Independents, expectations were essentially unchanged from the past month or so for personal finances, short-run business conditions and long-run business conditions,” Hsu said in the release.
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