Last Update: 12-Dec-14 10:07 ET
- The University of Michigan Consumer Sentiment Index increased to 93.8 in the preliminary December reading from 88.8 in November. The Briefing.com consensus expected the index to increase to 89.5.
- The December reading marked the highest point in consumer sentiment since the index reached 96.9 in January 2007.
- Strong improvements in the labor market and lower gasoline prices offset a slightly downward trending stock market, which helped boost sentiment.
- The Consumer Expectations Index increased to 86.1 in December from 79.9 in November. The Current Conditions Index rose to 105.7 from 102.7. Both gains represent seven-year highs.
- Consumption growth relies on income gains. As long as income growth accelerates, like it did in November, consumption growth will follow regardless of how sentiment trends.
- Consumer sentiment has little influence on consumption. As long as payroll levels continue to expand, the resulting income growth should keep consumption gains steady regardless of the monthly ebbs and flows in sentiment.