Despite persistently high prices, Americans are feeling better about the economy. Consumer sentiment rose for the fifth straight month in December, according to the latest survey from the University of Michigan.
“Broadly speaking, while consumers still do not feel that they are thriving, they view the economy much more favorably than they did two years ago when inflation was at a peak,” the university's Surveys of Consumers chief economist Joanne Hsu said in a statement. “Still, high prices remain a top concern for consumers.”
Hsu said many consumers are concerned that tariff hikes President-elect Donald Trump has said he plans to enact upon taking office will worsen the prices they pay for everything from food and electricity to housing.
Still, Republicans are optimistic Trump’s economic policies will reduce inflation, while Democrats say Trump will increase it. Independents are split between the two.
Consumer sentiment in December rose 3.1% compared with November and is up 6.2% from a year earlier. It is about midway between its all-time low in June 2022 when inflation spiked at 9.1% and pre-pandemic levels.