UoM confidence surprises to upside

The 1st UoM confidence reading of the month was 74.2, 1.7 pts above expectations, up from 71.6 in Nov and is the best since June when it was at 76. Both Current Conditions and the Economic Outlook moved higher and the Current component in particular rose to the best since Jan ’08. Because the state of the labor market is such a large component of one’s consumer confidence, maybe the jobs picture, while not great, is not as soft as Friday’s Nov figure implied. One year inflation expectations ticked down .1% to 2.9% from last month’s highest # since May. With the average gallon of gasoline less than .03 from $3.00 according to AAA last night, we’ll see how much longer inflation expectations remain tame.

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