Consumer Sentiment Rises?

We were surprised to see that consumer sentiment rose in December despite the spike in COVID-19 cases and economic restrictions. In NYC, indoor dining was closed starting Monday. There are tough restrictions in California as well. Despite this, the December University of Michigan consumer sentiment index rose from 76.9 to 81.4 which beat estimates for 76 and the highest estimate which was 78.

Current conditions rose from 87 to 91.8 despite the recent spike in initial jobless claims and the coming expiration of pandemic benefits on December 26th if Congress doesn’t pass an extension. Expectations rose from 70.5 to 74.7 which makes more sense because the vaccines are coming soon. 2.9 million Pfizer vaccine doses are being sent to America this week following the approval by the FDA. Next up is the Moderna vaccine.

Consumer sentiment increased because politics was a bigger deal than the virus. From August to December, consumer expectations among Democrats rose 39.5 points and it fell 34.9 points among Republicans. Democrats are more likely to worry about the virus. They probably think because a Democrat is president, the virus will be handled better and vice versa for Republicans. The January 5th Georgia Senate elections will determine the balance of the upper chamber. The Dems need to win both seats to split the Senate in half. The tie vote goes to the VP which is a Democrat.

Good Holiday Shopping Season

The BAC card spending data has been better than the JP Morgan card spending data recently. On a cumulative basis, from November 1st to December 5th holiday sales were up 19%. Goods spending dominated.

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