WASHINGTON (12/15/14)--Consumer confidence as tracked by the University of Michigan's consumer sentiment survey jumped by five points in December up to a reading of 93.8, the highest number recorded in eight years (Economy.com Dec. 12).
Positive assessments of current finances for consumers and optimism in the economy over the coming months helped drive up the index's top-line measure, which comfortably surpassed expectations, according to Moody's analysts.
"Even though the upward trend in confidence has been in place since late 2013, the past several months mark a sharp acceleration in improvement," said Nate Kelley, Moody's analyst (Economy.com). "Lower gasoline prices are giving consumers some financial breathing room, which may have played a role in a stronger than expected rise in retail sales for November.
"This has coincided with job growth that has been strong enough to pull the unemployment rate significantly lower over the past year."
The economic outlook subindex climbed 6.2 points to 86.1 from 79.9, its highest reading since early 2007 and the largest increase since May 2013.
The current economic conditions index climbed 3 points to 105.7, also a multiyear high.
Despite bottomed-out oil prices, consumers forecasted prices will rise 2.9% over the next 12 months, a slight increase from last month's estimate of 2.8%. Over the next five years, consumers see prices rising 2.9% per year, up from the 2.6% that was predicted last month.