Consumer confidence data from the University of Michigan showed an impressive (and surprising) rebound in preliminary December data with the headline print rising from near record lows at 51.0 to 53.3 (well above the 52.0 exp)…
Source: Bloomberg
This month’s increase was concentrated primarily among younger consumers. 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.
Labor market expectations improved slightly – 63% of consumers expect unemployment to rise in the year ahead, down from 69% in November but still much higher than the 40% seen a year ago, according to Surveys of Consumers Director Joanne Hsu.
“Consumers see modest improvements from November on a few dimensions, but the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices.”
Most notably, reality is finally starting to hit for the Democrats who were fearmongered into believing inflation would explode under Trump.
Year-ahead inflation expectations decreased from 4.5% last month to 4.1% this month, the lowest reading since January 2025. This marks four consecutive months of declines. Additionally, long-run inflation expectations softened from 3.4% last month to 3.2% in December, matching the January 2025 reading
Source: Bloomberg
Independents saw long-term inflation expectations plunge…
Source: UMich
But it was the Democrats that really came to their senses
Source: Bloomberg
Simply put, UMich’s Hsu is forced to admit that consumers have noted that the soaring inflation they feared in April and May 2025 at the height of tariff developments has not come to fruition at this time.
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