The first Dec UoM confidence figure was much better than expected at 73.4 vs the estimate of 68.8 and is up from 67.4 in Nov. It’s just shy of the highest since Jan ’08 and with respect to holiday sales, the improvement couldn’t come at a better time. The gain was mostly led by the Current Conditions component which rose to 79.1 from 68.8. The future Outlook rose to 69.7 from 66.5. Maybe due to the holiday sales seen, such as door busters, one year inflation expectations fell to 2.1% from 2.7% in Nov. Interestingly though, the exact same thing happened in Dec ’08 as inflation expectations fell from 2.9% to 1.7% only to rise in subsequent months. Also last Dec, consumer confidence jumped 5 pts from Nov as the holiday season seemed to have helped to improve psychology this year and last in light of a tough economy. Hopefully this time around it lasts into 2010.
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