Consumer sentiment increased in November but remained historically low, according to December’s University of Michigan Surveys of Consumers.
The index for consumer sentiment increased by 4 percent to 59.1, which is still 16.3 percent lower than the reading of 70.6 in December 2021. The index for current economic conditions increased by 2.4 percent to 60.2, which is still nearly 19 percent lower than the year-ago figure of 74.2. The index for consumer expectations increased 5 percent to 58.4, which is still 14.5 percent lower than last December’s reading of 68.3.
Year-ahead inflation expectations fell from 4.9 percent to 4.6 percent but remained relatively high, said Surveys of Consumers Director Joanne Hsu. Declines in short-term inflation expectations were seen across the distribution of age, income, education and political party identification. Long-run inflation expectations remained within the 2.9 percent to 3.1 percent range.
“Gains in the sentiment index were seen across multiple demographic groups, with particularly large increases for higher-income families and those with larger stock holdings, supported by recent rises in financial markets,” Hsu said. “Sentiment for Democrats and Independents rose 12 percent and 7 percent, respectively, while for Republicans it fell 6 percent. Throughout the survey, concerns over high prices — which remain high relative to just prior to this current inflationary episode — have eased modestly.”