U.S. consumer sentiment rose in December due to falling prices, though job losses and declining income continued to affect sentiment, a survey showed on Tuesday. The University of Michigan reported that its final index reading of consumer sentiment in December rose to 60.1 from 55.3 the previous month. The reading was above economists' expectations. December's final reading was the highest since September and was also above the preliminary December reading of 59.1. However, “absent the gain due to unusually steep pre-holiday price discounts, the sentiment index would be virtually unchanged,” the report said. “More consumers expected declines in prices than in any other survey since 1960,” but price declines were only modestly offsetting difficult economic conditions, the report said. “The personal financial situation of consumers remains bleak, with the majority reporting that their finances had worsened during the past year,” the report said. “While declines in stocks and home values depleted their wealth, the fewest consumers in the long history of the surveys reported income gains in December. The survey's index of current conditions rose to 69.5 this month from 57.5 in November, while the index of consumer expectations rose modestly to 54.0 from 53.9.
