The Conference Board released a report on Wednesday showing U.S. consumer confidence improved by much more than expected in the month of December.
The report showed the consumer confidence index climbed to 115.8 in December from an upwardly revised 111.9 in November.
Economists had been expecting the consumer confidence index to inch up to 110.7 from the 109.5 originally reported for the previous month.
The bigger than expected increase by the headline index reflected an improvement in consumer expectations, with the expectations index advancing to 96.9 in December from 90.2 in November.
The Conference Board said the percent of consumers expecting business conditions to improve rose to 26.7 percent from 25.6 percent, while those expecting conditions to worsen fell to 17.9 percent from 19.6 percent.
Consumers were also more optimistic about the short-term labor market outlook but slightly less positive about their short-term financial prospects.
Meanwhile, the report showed the present situation index edged down to 144.1 in December from 144.4 in November but remained at an elevated level.
While consumers’ appraisal of current business conditions was more favorable in December, their assessment of the labor market was moderately less favorable.
“Concerns about inflation declined after hitting a 13-year high last month as did concerns about COVID-19, despite reports of continued price increases and the emergence of the Omicron variant,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
She added, “Looking ahead to 2022, both confidence and consumer spending will continue to face headwinds from rising prices and an expected winter surge of the pandemic.”
On Thursday, the University of Michigan is scheduled to release its revised reading on consumer sentiment in December.
The consumer sentiment index for December is expected to be unrevised from the preliminary reading of 70.4, which was up from 67.4 in November.
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