University of Michigan's Index of Consumer Sentiment posted a preliminary December level of 69.4, up from November's 61.3; broad consensus of improved sentiment across age, income, education, geography, and political identification

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December 8, 2023 (press release) –

Preliminary Results for December 2023

	Dec	Nov	Dec	M-M	Y-Y
	2023	2023	2022	Change	Change
Index of Consumer Sentiment	69.4	61.3	59.8	+13.2%	+16.1%
Current Economic Conditions	74.0	68.3	59.6	+8.3%	+24.2%
Index of Consumer Expectations	66.4	56.8	60.0	+16.9%	+10.7%

Interest Rate and Price Pressures on Consumers (September 8, 2023)
Revisions to Estimates (October 27, 2023)

Next data release: Friday, December 22, 2023 for Final December data at 10am ET
Surveys of Consumers Director Joanne Hsu
Consumer sentiment soared 13% in December, erasing all declines from the previous four months, primarily on the basis of improvements in the expected trajectory of inflation. Sentiment is now about 39% above the all-time low measured in June of 2022 but still well below pre-pandemic levels. All five index components rose this month, led by surges of over 24% for both the short and long-run outlook for business conditions. There was a broad consensus of improved sentiment across age, income, education, geography, and political identification. A growing share of consumers—about 14%—spontaneously mentioned the potential impact of next year’s elections. Sentiment for these consumers appears to incorporate expectations that the elections will likely yield results favorable to the economy.

Year-ahead inflation expectations plunged from 4.5% last month to 3.1% this month. The current reading is the lowest since March 2021 and sits just above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations fell from 3.2% last month to 2.8% this month, matching the second lowest reading seen since July 2021. Long-run inflation expectations remain elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic.

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