Consumer Sentiment Index Reaches Highest Level Since ’07 in December Reading

Author: Tory Barringer December 15, 2014 Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services2

Consumer sentiment gained another five points in an early December measure, putting confidence levels at a near eight-year high.

The Thomson Reuters/University of Michigan survey of consumer sentiment came in at a preliminary index reading of 93.8 for December, up from November's final reading of 88.8. December's report beat economists' forecasts by more than four points and puts the index at its highest level since January 2007.

Increases in the latest measure were broad-based. The gauge measuring consumer expectations jumped 6.2 points to hit 86.1, also the highest since January 2007, while the measure of consumer economic sentiment was up three points to 105.7, the highest since February 2007.

While the month's final index—due December 23—could see an adjustment, the latest reading is a positive sign in the middle of the holiday shopping season.

In a statement, survey director Richard Curtin noted that expected wage gains are at their highest level since 2008, and consumer attitudes toward buying are the most favorable they've been in several decades.

"Obviously, lower gasoline prices, well received employment reports, and a more optimistic view on the direction of the economy are helping drive consumer mood higher," said Chris Christopher, director of U.S. consumer economics for IHS Global Insight, in a note.

Christopher also gave some of the credit to lawmakers, who in the past few years have stood in the way of growth over debates like 2012's fiscal cliff and last year's government shutdown. This year, they're on track to avoid another shutdown with a last-minute deal.

"The budget deal passing is another big plus for consumer mood since continued political bickering and finger pointing is a downer," he said.