23 Dec 2015
US: Michigan Consumer Confidence index rises to 92.6, highest since July
FXStreet (Córdoba) - The University of Michigan Consumer Sentiment index showed a final reading of 92.6 against expectations of 92.0. It represents the third monthly gain in a row and the highest level since July.
The current conditions index rose from 107.0 to 108.1 while the expectations index climbed modestly from 82.0 to 82.7. Regarding inflation, one-year inflation expectations decline from 2.7% to 2.6% while over 5 to 10 years remained at 2.6%.
Key Quotes:
“Consumer confidence rose to its highest level since July, with the December reading nearly equal to the 2015 average of 92.9--which was the highest since 2004. Importantly, all of the improvement was in how consumers evaluated current economic conditions.”
“Just as consumer optimism became dependent on very low inflation, the Fed has begun to take steps to accommodate a higher inflation rate. Since wages are never first to incorporate inflationary adjustments, consumers will make their purchases even more contingent on low prices.”
“Moreover, given the weakness in the global economy and the strong dollar, discounting will continue unabated. As a result, the Fed policies will need to be much stronger to overcome the disinflationary psychology of consumers.”
The current conditions index rose from 107.0 to 108.1 while the expectations index climbed modestly from 82.0 to 82.7. Regarding inflation, one-year inflation expectations decline from 2.7% to 2.6% while over 5 to 10 years remained at 2.6%.
Key Quotes:
“Consumer confidence rose to its highest level since July, with the December reading nearly equal to the 2015 average of 92.9--which was the highest since 2004. Importantly, all of the improvement was in how consumers evaluated current economic conditions.”
“Just as consumer optimism became dependent on very low inflation, the Fed has begun to take steps to accommodate a higher inflation rate. Since wages are never first to incorporate inflationary adjustments, consumers will make their purchases even more contingent on low prices.”
“Moreover, given the weakness in the global economy and the strong dollar, discounting will continue unabated. As a result, the Fed policies will need to be much stronger to overcome the disinflationary psychology of consumers.”