MICHIGAN (awp international) – US consumer sentiment brightened in December, with inflation expectations falling significantly. The consumer climate surveyed by the University of Michigan rose to 69.7 points from 61.3 points in the previous month, the university announced Friday after a second assessment. In the initial assessment, 69.4 points were determined. Economists on average expected the initial estimate to be confirmed. Both the assessment of the current situation and consumer expectations are bright.
Consumers' inflation expectations fell significantly. Over a one-year period, they fell from 4.5 percent to 3.1 percent. The decline of 1.4 percentage points was the largest in 22 years. Long-term inflation expectations fell to 2.9 percent from 3.2 percent in the previous month.
Inflation expectations are particularly focused on financial markets, as the US Federal Reserve's future interest rate decisions depend on developments in economic data. At its most recent meeting, the central bank again left the key interest rate unchanged. Lately there has been speculation in the markets about an interest rate cut in the coming year.
The University of Michigan indicator measures the purchasing behavior of American consumers. It is based on a telephone survey of around 500 households. A financial and economic assessment of the situation and associated expectations is requested./jsl/he
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