Consumer sentiment ticks higher in December as inflation expectations improve

US consumer sentiment improved slightly in December, even as Americans grappled with a frozen job market and rising prices.

The overall preliminary sentiment reading compiled by the University of Michigan’s regular survey of consumers was 53.3, compared to last month’s level of 51. The median estimate from Bloomberg’s survey of economists projected December’s gauge hitting 52. The index hadn’t increased on a monthly basis since July.

But consumer sentiment remains 28% lower than this time a year ago.

“Overall, while views of current conditions were little changed, expectations improved, led by a 13% rise in expected personal finances, with improvements visible across age, income, education, and political affiliation,” Joanne Hsu, the director of the survey of consumers, said in a statement Friday.

“Still, December’s reading on expected personal finances is nearly 12% below the beginning of the year,” Hsu continued. “Similarly, labor market expectations improved a touch but remained relatively dismal.”

Consumers expect prices to rise at a rate of 4.1% over the next year, the lowest reading since January and down from the expected 4.5% rate last month, the survey showed.

Hsu noted that consumers still don’t necessarily feel positive, though, saying the “overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices.”

Data published this week has offered a mixed bag on the state of the economy. Initial claims for unemployment benefits slid to their lowest level in more than three years for the week ending Nov. 29, though new data from the private payroll processor ADP showed employers unexpectedly shed 32,000 positions in November. A report from the global outplacement firm Challenger, Gray & Christmas, meanwhile, said employers announced 71,321 layoffs last month.

Official data on prices and jobs from the government has been coming at a sluggish pace following the government shutdown, but shows unemployment at 4.4% and inflation at 3% on an annual basis in September. Fresh data on payroll growth and price increases will be released Dec. 16 and Dec. 18, respectively.

Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.

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