Reports Offer Mixed View of Economy

Consumers are feeling better about the economy midway through the holiday season, a report from the University of Michigan said Friday.

The report was released after the federal government said business inventories and sales rose while producer prices fell.

The University of Michigan said that its index of consumer sentiment rose to 87 in December from a reading of 84.2 in November. The report was the preliminary report for the month of December.

The Commerce Department said that business inventories rose 0.2% in October, following a revised 0.6% gain in September. Sales by factories, wholesalers and retailers rose 0.4% after a 0.7% decline in the previous month.

Analysts said that the report is part of a trend of businesses rebuilding their inventories as the economy recovers, Bloomberg reported.

Prices paid to producers fell 0.4% in November. The decline followed an unusually large 1.1% increase in October, the Labor Department said. The "core PPI," which excludes volatile prices for food and energy, declined 0.3%.

Observers noted that the lack of upward pressure on prices has helped the Federal Reserve to take an aggressive stance to help stimulate the economy, Bloomberg said.