Consumer Confidence Rose More Than Expected During the Holiday Shopping Season
Consumer confidence in the U.S. rose more than forecast in December, to a six-month high, as unemployment declined and gasoline prices moved lower.
The Thomson Reuters/University of Michigan consumer sentiment index climbed to 69.9 from 64.1 at the end of November. The gauge averaged 89 points in the five years leading up to the recession that began in December 2007 and ended in June 2009.
A steep drop in the national unemployment rate last month seems to be a trend rather than a fluke, as weekly jobless claims reports show the number of unemployed in the U.S. continuing to decrease in December. In the week ended December 17, new claims for jobless benefits dropped by 4,000 to a seasonally-adjusted 364,000 — the lowest since April 2008.
“Income growth and a reviving job market are helping restore confidence,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. The “recent decline in jobless claims and gasoline prices are a positive.”
The index of U.S. leading indicators climbed more than forecast in November, a sign the world’s biggest economy will keep growing in early 2012. The Conference Board’s gauge of the outlook for the next three to six months rose 0.5 percent after a 0.9 percent increase in October.
The University of Michigan’s survey of consumer expectations for six months from now, which more accurately projects the direction of consumer spending, also rose to 63.6 in December, compared to 55.4 last month, marking the fourth straight gain and the biggest point increase in a single month since May.
The index of current conditions, which reflects Americans’ perceptions of their own personal financial situations, and whether they consider it a good time to purchase big-ticker items, increased from 77.6 last month to 79.6 in December, the highest since June.
The survey also showed consumers to be expecting the rate of inflation to rise 3.1 percent over the next 12 months, down from 3.2 percent in November. Over the next five years, Americans expect a 2.7 percent rate of inflation.