Consumer Sentiment Recovers Slightly, After 10-Year Low 

Consumer sentiment in the U.S. rose to 70.4 for December of this year, a slight improvement from the 10-year low logged last month.

That’s according to the University of Michigan, which publishes the figures each month. In December, it found sentiment to be at 67.4, its lowest point in a decade and down sharply from the 100-plus neighborhood from last year. 

December’s figure was ahead of the market forecast of 67.15. According to the university, both current conditions — 74.6 versus 73.6 — and expectations — 67.8 versus 63.5 — improved, while expectations about inflation for the year to come held at 4.9% and 3% for the next five years. 

Read more: Rising Inflation Lowers Consumer Confidence 

“The more interesting result was the large disparity between monthly gain among households with incomes in the lowest third (+23.6%) of the income distribution compared with the modest losses among households in the middle (-3.8%) and top third (-4.3%),” the report said. “The core of the renewed optimism among the bottom third was the expectation of income increases of 2.9% during the year ahead.”

Read more: Inflation Hits 39-Year High With CPI up 6.8% 

This report comes on the same day inflation in the U.S. reached its highest point in 39 years, with the consumer price index (CPI) rising 6.8%.  

According to the Bureau of Labor Statistics’ weekly report, the CPI rose at its sharpest rate since 1982, with inflation topping 5% for the sixth month in a row. 

Read more: Inflation: The Economic Variant That Kills Paycheck-to-Paycheck Consumer Confidence

Inflation and rising prices remain a key concern for both households surviving paycheck to paycheck and those living more comfortably, as a recent PYMNTS survey found, with 87% of respondents citing concerns about higher prices. 

“Such widespread economic pessimism does not come out of nowhere, and sticker shock may be a key culprit,” the report concluded. “Consumers are never fond of going to the store and finding out that everything is more expensive, and it is no wonder that the proportion of respondents who are highly concerned about inflation increased to 81% in October.”