Consumer confidence is at an almost 8-year high.
On Friday, the University of Michigan’s preliminary consumer confidence reading for December came in at 93.8, the best reading since January 2007 and a complete blowout of expectations.
According to Paul Dales at Capital Economics, this data coupled with Thursday’s strong retail sales report indicates that we are looking at the best holiday shopping season in nine years.
And there’s a big reason why: confidence among the lowest wage earners is roaring higher.
In an email on Friday, Deutsche Bank economist Torsten Slok circulated the following chart showing that confidence among those in the bottom tercile of household incomes — the lowest third of households — surged to the highest since 2005.
This is a far larger increase in confidence that the headline reading, and Slok attributed this surge among the lowest earners to the drop in gas prices.
According to AAA, gas prices hit an average of $US2.60 a gallon on Friday, the lowest since 2009.
Crude oil was falling again on Friday, likely adding further downward pressure to gas prices, and potentially boosting further what already looks to be a strong holiday shopping season.