US consumer confidence unexpectedly improved at the end of the year as inflation eased. The Consumer Confidence Index rose to a revised 108.3 in December from a revised 101.4 in November, the institute’s Conference Board reported in its survey Wednesday. This is the best value since April. Economists expected only 101.0 points.
The reason for the improvement in consumer sentiment is evidence of abating high inflation, which is weighing on Americans’ buying mood. Inflation in goods and services fell to an annual low of 7.1 percent in November. “December inflation expectations fell to their lowest level since September 2021, with the recent drop in gasoline prices providing significant impetus,” Lynn Franco of the Conference Board said, explaining the rising sentiment.
According to the survey, Americans are willing to spend more money on vacations. On the other hand, the desire to buy homes and large appliances continued to decline. Perhaps this is due to sharp increases in interest rates by the US Federal Reserve, which caused, for example, a rise in mortgage rates.
The Fed recently raised interest rates by half a percentage point to the new range of 4.25 to 4.50 percent. Previously, it had made four big rate hikes in a row — by 0.75 percentage points each time.
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