Revised data released by the University of Michigan on Thursday showed consumer sentiment in the U.S. improved by slightly more than initially estimated in the month of December.
The report showed the consumer sentiment index for December was upwardly revised to 70.6 from the preliminary reading of 70.4. The revised reading is even further above the ten-year low of 67.4 seen in November.
Surveys of Consumers chief economist Richard Curtin said the monthly increase by the consumer sentiment index was primarily due to significant gains among households with incomes in the bottom third of the distribution.
“Indeed, the bottom third expected their incomes to rise during the year ahead by 2.8%, up from 1.8% last December, and the highest level since 2.9% was recorded in 1999,” Curtin said.
He added, “The announced increase in Social Security payments of 5.9% in 2022 was partly responsible for the gain, and 5.0% increases in expected wage among the youngest workers.”
The report also showed the index of consumer expectations climbed to 68.3 in December from 63.5 in November, while current economic conditions index rose to 74.2 from 73.6.
On the inflation front, one-year inflation expectations edged down to 4.8 percent in December from 4.9 percent in November and five-year inflation expectations slipped to 2.9 percent from 3.0 percent.
“Importantly, too few interviews were conducted to capture the impact of the rapid spread of the Omicron variant in the U.S.” Curtin said.
He added, “Confidence and spending are likely to be depressed in January, but it is too early to know the eventual impact of Omicron on the economy.”
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