US consumer confidence steady in December, but expectations dip, University of Michigan says
By Alexander Bueso
Date: Friday 07 Dec 2018
(Sharecast News) - US consumer confidence was steady at the start of December, but their confidence in the outlook ebbed, according to the results of perhaps the most widely-followed survey of American consumer spirits.
According to a preliminary reading, the University of Michigan's consumer confidence index was unchanged from the month before at 97.5.
That was better than the reading of 97.0 that economists had penciled-in.
Nevertheless, the sub-index linked to consumer expectations - the most closely watched sub-component of the survey - slipped from a reading of 88.1 at the end of November to 86.1.
To take note of too, readings for consumers' expectations on a one and five-year horizon also retreated, from 2.8% to 2.7% and from 2.6% to 2.4%, respectively.
Americans were however considerably more upbeat on the current situation, with the corresponding sub-index jumping from 112.3 to 115.2.
Commenting on the results of the survey, the UofM's Richad Curtin stressed the tight link between consumers' expectations for unemployment and their spending on durable goods, noting that "consumers did mention hearing much more negative news about future job prospects."
"Most consumers understand that the goal of increasing interest rates is to slow the pace of economic growth," he said.
"In past expansions, there was plenty of room between low and high interest rates to nudge up rates without damaging consumer spending. The gap has been squeezed to just a few percentage points and more caution is now warranted."
Nevertheless, over the past two years the headline confidence index had been running above 90.0, its best such run since the period between 1997 to 2000, when it recorded a four-year average of 105.3, with the differences between the two periods having to do mostly with job and wage prospects, Curtin explained.
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