Consumer Sentiment Bouncing Back

Consumer sentiment is bouncing back after ebbing following the Paris attacks. The flash December index comes in at 91.8 which is 5 tenths above final November and perhaps several points above the trend during the last two weeks of November. Strength is centered in current conditions which, up nearly 3 points to 107.0, is a positive indication for holiday spending. Expectations, however, continue to lag, down 9 tenths to 82.0 to indicate caution over the long-term jobs outlook. Inflation readings, reflecting low fuel prices, remain subdued at 2.6 percent for both the 1- and 5-year outlooks. This report, following strength in core retail sales, is another positive for the consumer which continues to benefit from current strength in the jobs market and low gas prices.

Recent History Of This Indicator:
Consumer sentiment fell back sharply in the last half of November to a final reading of 91.3 vs a mid-month flash of 93.1 but is expected to improve slightly to 92.0 in the flash reading for December. Weakness in this report, and in other confidence reports as well, has been centered in expectations and not current conditions which is a plus for holiday sales. Nevertheless, lowered expectations, presumably the effects of global issues, could begin to hold down expectations for growth in 2016. And note the low forecast in the Econoday consensus, at 86.5 in a reading that could scramble the outlook for holiday spending.