Consumer sentiment has unexpectedly improved in the month of December, according to a preliminary report released by the University of Michigan on Friday.
The report said the consumer sentiment index climbed to 81.4 in December from 76.9 in November. The increase surprised economists, who had expected the index to edge down to 76.5.
Surveys of Consumers chief economist Richard Curtin said the unexpected improvement in consumer sentiment was due to a partisan shift in economic prospects.
“Following Biden’s election, Democrats became much more optimistic, and Republicans much more pessimistic, the opposite of the partisan shift that occurred when Trump was elected,” said Curtin.
He added, “As has been documented in the past four years, self-identified Independents adopted more balanced views, maintaining their economic expectations in December at the same unfavorable levels as when the covid crisis began nine months ago.”
Cutrin called it “surprising” that the recent resurgence in coronavirus infections and deaths was overwhelmed by partisanship.
The report also said the current economic conditions index rose to 91.8 in December from 87.0 in November, while the index of consumer expectations climbed to 74.7 from 70.5.
On the inflation front, one-year inflation expectations slumped to 2.3 percent in December from 2.8 percent in November. Five-year inflation expectations were unchanged at 2.5 percent.
The material has been provided by InstaForex Company – www.instaforex.com