US consumer confidence picked up in December when analysts had expected it to fall, but remained at a historic low, according to the preliminary estimate from the University of Michigan released on Friday.
The index stood at 59.1 points, compared to 56.8 points in November. This rebound surprised analysts, who saw the index retreat once more and fall to 56.5 points, according to MarketWatch consensus.
This increase in confidence is observed within various categories of the population, with however “particularly significant increases for families with higher incomes and those who hold more shares, supported by the recent increases in the financial markets”, details Joanne Hsu, director of the investigation, quoted in a press release.
Moreover, consumers are more confident regarding the evolution of inflation in the coming months. ‘Inflation expectations for the coming year have improved considerably, but have remained relatively high,’ she said.
Thus, the level of inflation anticipated by households is the lowest for 15 months, but it is ‘still well above’ the level they anticipated 2 years ago.
‘For households, lower gas prices and a still strong labor market are positives. But high prices coupled with ongoing aggressive rate hikes will be a challenge for consumers and confidence going forward,” said Rubeela Farooqi, chief economist for HFE, in a note.
Inflation slowed in October, to 7.7% over one year once morest 8.2% in September, according to the CPI index, which refers. November data will be released on Tuesday.
To slow inflation, the US central bank (Fed) raises its key rates, which raises interest rates on loans for households and businesses, lowering consumption and investment.
But this tightening risks plunging the American economy into recession in 2023, fear many analysts and economists.
/ATS