Lower prices thaw consumer fears

Consumer took some heart in December, as lower prices have provided a measure of relief to jittery Americans fretting about continued job losses and decreasing incomes, according to The Reuters/University of Michigan Surveys of Consumers. Its index of consumer sentiment inched up to a reading of 60.1 in December, higher than the preliminary figure of 59.1 released earlier this month. Economists surveyed by Briefing.com Inc. of Chicago had forecast a reading of 58.8. The reading was from up the 55.3 reading recorded in November, a 28-year low. This month's figure is markedly below the 75.5 reading recorded in December 2007. Despite the improvement in December, total consumer spending is expected to decline by about 1% in 2009, which will be followed by an "unusually slow" recovery in 2010, Richard Curtin, director of the survey, said a statement. The index of consumer expectations, regarding the state of the economy six months from now, inched up to 54 in December from 53.9 in November. The consumer conditions index, which measures Americans' perceptions of their financial situation, jumped to 69.5, from 57.5 in November. Thompson Reuters is based in New York, and the University of Michigan is in Ann Arbor.