A recently released survey report shows that despite ongoing concerns among American consumers about high prices and the labor market, consumer confidence has improved in early December, marking the first rise in five months.
The “Consumer Surveys” report released by the University of Michigan on Friday, December 5, indicated that the preliminary Consumer Sentiment Index for December in the United States rose to 53.3, higher than November’s 51.0, and also exceeded the predictions of economists surveyed separately by Reuters and Bloomberg, who had forecasted 52.
This marks the first monthly increase in the index since July, albeit still showing a 28% decrease compared to the same period last year.
The survey covered consumer feedback from November 18 to December 1 and was conducted following the 43-day government shutdown.
Joanne Hsu, Director of the University of Michigan Consumer Survey, stated in a release on Friday, “Overall, although there has been no significant change in perceptions of the current situation, expectations have improved, primarily driven by a 13% increase in expectations for personal finances, with these improvements seen across different age groups, income levels, education levels, and political affiliations.”
“However, expectations for personal finances in December are still nearly 12% lower than at the beginning of this year,” Hsu added. “Similarly, while expectations for the labor market have slightly improved, they are still relatively poor.”
The report released on Friday also revealed that consumers anticipate a 4.1% annual increase in prices over the next year, which is a decrease from the 4.5% level predicted a month ago and the lowest level since January. Consumers also project a 3.2% annual growth in living costs over the next five to ten years, compared to their prediction last month of 3.4% for the year.
Despite the improved expectations, persistently high living costs continue to weigh on consumer confidence, serving as a major factor affecting consumer sentiment this year.
Director Hsu pointed out in a statement, “Consumers have noted that the inflation surge they feared during the peak of tariff developments in April and May 2025 has not yet materialized. However, expectations of inflation for both that period and the present remain higher than the averages in 2024 and 2020.”
Hsu highlighted that younger consumers drove the rise in the Consumer Sentiment Index for December, which increased by 4.5% compared to November.