{"id":216081,"date":"2024-12-06T10:45:00","date_gmt":"2024-12-06T15:45:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=216081"},"modified":"2025-01-23T12:36:56","modified_gmt":"2025-01-23T17:36:56","slug":"consumer-sentiment-hits-7-month-high-but-inflation-fears-divide-democrats-republicans","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/consumer-sentiment-hits-7-month-high-but-inflation-fears-divide-democrats-republicans\/","title":{"rendered":"Consumer Sentiment Hits 7-Month High, But Inflation Fears Divide Democrats, Republicans"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-zinger-key-points\">Zinger Key Points<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Consumer sentiment index hit a 7-month high, driven by strong current conditions.<\/li>\n\n\n\n<li>Inflation expectations rose, sparking partisan divides over policy impacts and economic outlook.<\/li>\n<\/ul>\n\n\n\n<p>The University of Michigan\u2019s closely watched Consumer Sentiment Index surged to a seven-month high in December, reflecting improved current economic conditions while also signaling growing concerns over rising&nbsp;<a href=\"https:\/\/www.benzinga.com\/topic\/inflation\" target=\"_blank\" rel=\"noreferrer noopener\">near-term inflation expectations.<\/a><\/p>\n\n\n\n<p>Notably, nearly 25% of respondents\u2014the highest proportion since this data series began in 2012\u2014stated that now is a good time to make purchases, anticipating further price increases ahead.<\/p>\n\n\n\n<p>\u201cA surge in buying conditions for durables led Current Economic Conditions to soar more than 20%. Rather than a sign of strength, this rise in durables was primarily due to a perception that purchasing durables now would enable buyers to avoid future price increases,\u201d said University of Michigan\u2019s Surveys of Consumers Director&nbsp;<strong>Joanne Hsu<\/strong>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">December Consumer Sentiment Report: Key Highlights<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Preliminary estimates from the University of Michigan showed that the consumer sentiment index rose from 71.8 points in November to 74 points in December, marking a 3.1% monthly surge and surpassing economist estimates, as tracked by TradingEconomics, of 72.<\/li>\n\n\n\n<li>The sub-index for consumer expectations declined from 76.9 to 71.6 points, falling to a 4-month low.<\/li>\n\n\n\n<li>The sub-index for current conditions soared from 63.9 to 77.7, the highest since April.<\/li>\n\n\n\n<li>Year-ahead inflation expectations rose from 2.6% to 2.9%, the highest since July, and above the expected 2.7%.<\/li>\n\n\n\n<li>Long-term inflation expectations fell slightly, from 3.2% to 3.1%, as expected.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Economist Takeaways<\/h2>\n\n\n\n<p>\u201cThe expectations index continued the post-election re-calibration that began last month, climbing for Republicans and declining for Democrats in December,\u201d&nbsp;<strong>Hsu&nbsp;<\/strong>wrote in the report.&nbsp;<\/p>\n\n\n\n<p>\u201cDemocrats voiced concerns that anticipated policy changes, particularly tariff hikes, would lead to a resurgence in inflation. Republicans disagreed; they expect the next president will usher in an immense slowdown in inflation,\u201d she added. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Market Reactions<\/h2>\n\n\n\n<p>The U.S. dollar index \u2013 tracked by the\u00a0Invesco DB USD Index Bullish Fund ETF\u00a0rose by 0.3% after the December consumer sentiment report.<\/p>\n\n\n\n<p>Both S&amp;P 500 and the tech-heavy Nasdaq 100 indices were up by 0.4% and 0.7% by 10:15 a.m. in New York, while the Dow Jones held broadly steady.<\/p>\n\n\n\n<p>Small caps, tracked by the\u00a0iShares Russell 2000 ETF\u00a0rose 0.4% higher.<\/p>\n\n\n\n<p>Shorter-dated Treasury yields fell, with the 2-year yield down by 5 basis points. Following the latest jobs market data, investors hiked their rate-cut expectations, now assigning a 90% chance of a 25-basis-point rate ease.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted December 6, 2024 &#8211; <a href=\"https:\/\/www.benzinga.com\/news\/econ-s\/24\/12\/42366245\/consumer-sentiment-hits-7-month-high-but-inflation-fears-divide-democrats-republicans\">Consumer Sentiment Hits 7-Month High, But Inflation Fears Divide Democrats, Republicans<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The University of Michigan\u2019s closely watched Consumer Sentiment Index surged to a seven-month high in December, reflecting improved current economic conditions while also signaling growing concerns over rising near-term inflation expectations.<\/p>\n","protected":false},"author":1128,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[18,6,8,9,26,3],"tags":[1576,570],"contributors-categories":[13584],"class_list":{"0":"post-216081","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-consumer-sentiment","13":"tag-inflation","14":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Consumer Sentiment Hits 7-Month High, But Inflation Fears Divide 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