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U.S. Consumer Sentiment Unexpectedly Deteriorates In December

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Reflecting a deterioration in consumer expectations, the University of Michigan released a report on Friday showing an unexpected decrease in U.S. consumer sentiment in the month of December.

The report said the preliminary reading on the consumer sentiment index for December fell to 96.8 from the final November reading of 98.5. Economists had expected the index to inch up to 99.0.

With the unexpected decrease, the consumer sentiment index pulled back further off the thirteen-year high set in October.

"Most of the recent decline was concentrated in the long-term prospects for the economy, while consumers thought current economic conditions have continued to improve," said Richard Curtin, the survey's chief economist.

He added, "Importantly, the largest decline in long-term economic prospects was recorded among Democrats, which reflected their concerns about the impact of the proposed changes in taxes."

The report said the index of consumer expectations dropped to 84.6 in December from 88.9 in November, while the current economic conditions index rose to 115.9 from 113.5.

On the inflation front, one-year inflation expectations climbed to 2.8 percent in December from 2.5 percent in November, while five-year inflation expectations inched up to 2.5 percent from 2.4 percent.

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