A measure of consumer sentiment rose during December to 70.4 from 67.4 in the previous month and outpaced The Wall Street Journal’s projection of 68, according to the University of Michigan.

The reading is below the February 2020 pre-pandemic level of 101, but the reason for the recent rise is because of the renewed optimism among the bottom third of income distribution regarding income expectations, according to the survey’s chief economist Richard Curtin.

“This suggests an emerging wage-price spiral that could propel inflation higher in the years ahead,” Curtin added.

The measure of current economic conditions came in at 74.6, up from 73.6 in November, The Index of consumer expectations is at 67.8, up from 63.5 in the previous month.

According to Curtin, 76% of Americans feel inflation is a bigger problem compared to the 21% of Americans who feel the bigger problem facing the economy is unemployment.

Curtin noted the pandemic had an impact on personal finances like no other crisis in more than 50 years.

RELATED STORIES