Reuters consumer sentiment surges to seven year high

Consumer sentiment is surging this month, to 93.8 for the mid-month December reading vs an already strong 88.8 in final November and 89.4 in mid-month November. This is the strongest reading since January 2007. The current conditions component is up 3.0 points from final November to 105.7 in a gain that signals month-to-month strength in consumer activity this month. The expectations component, though lagging at 86.1, is up a very sharp 6.2 points to signal rising confidence in the outlook for income and jobs.

The falling price of gasoline is one reason behind the strength in sentiment and is a key factor keeping down inflation expectations which, however, are up in today's report, at 2.9 percent for the 1-year outlook, 1 tenth higher from final November, and also at 2.9 percent for the 5-year outlook for a 3 tenths gain. Still these inflation readings are tame.

The Dow is moving off opening lows in reaction to today's report, one that is good news for the nation's retailers going into the final holiday sales push.