The twin engines of cheap (and perhaps, finally, affordable) gasoline and a burgeoning U.S. payroll helped bring U.S. consumers to a relatively high confidence level in December, as Bloomberg reported on Wednesday (Dec. 23).
The University of Michigan said the same day that the final index reading of consumer sentiment for the year 2015 was at a score of 92.6, which was up from 91.3 in the previous month. It was also better than the projection of a number of economists, which had as consensus a 92 reading.
Consumer spending had been strong enough through the last several months to help boost confidence of another sort — that of the Federal Reserve, which finally raised rates in December, with a 25 basis point boost beyond the key target rate. The consumer is a key driver of the country’s economy, with roughly 70 percent of the total output.
In the most recent data, a number of macro-forces came into play and are still in force, as Richard Curtin, director of the Michigan polling, told the newswire. “The latest gain was largely due to lower inflation, which bolstered real incomes and brightened buying plans for household durables. Given the continued weakness in the global economy and the strong dollar, consumers can be expected to become even more demanding of price discounts in the year ahead.”
[bctt tweet="For consumer spending, a number of macro-forces came into play and are still in force."]
The survey looked for a range of 90 to 93.4 in this most recent data. The average for the whole year has stood at 92.9, which would indicate the highest annual average since 2004, as Bloomberg reported.
Separately, the survey noted that the current conditions index, which assigns a number tied to consumers’ measurement of their personal finances, stood at 108.1 this month, which was the highest reading since June of this year.