Consumer confidence soared in the final month of a year that saw the U.S. economy avoid the severe recession that some had predicted as the coronavirus pandemic dragged on.
The University of Michigan’s consumer sentiment index jumped 10.0 points in December to 79.2, its highest level since the start of the pandemic. It was up from 69.2 in November, and was significantly higher than the median forecast of 75.0 from economists surveyed by Bloomberg.
The rise in consumer confidence was driven by increased optimism about the US economy, as signs from recent economic data suggested that the US is recovering from the pandemic-induced recession with impressive resilience. The labor market in particular has shown improvements, with the unemployment rate falling to 6.7 percent from a peak of 14.7 percent in April.
This improvement in the labor market has helped boost consumer spending, as people are feeling more confident about their financial situation. This in turn has helped to keep the US economy on track to exit recession by the end of the year.
The jump in consumer confidence reflects Americans’ increased optimism that the economy will recover soon. It also suggests that the US economy has a good chance of continuing its rebound into 2021, as vaccine rollouts and additional financial stimulus should help to further bolster consumer spending.
