(Bloomberg) -- US short-term inflation expectations fell further at the end of the year and consumer sentiment improved, reflecting easing price pressures and relief at the gas pump.

Respondents said in December they expect prices to advance 4.4% over the next year, the lowest since June 2021 and below the preliminary reading, the University of Michigan’s final survey of consumers showed Friday. Over the next five to ten years, expectations ticked down to 2.9%.

The university’s final sentiment index rose to 59.7 during the month, up slightly from the reading earlier in December. The median estimate in a Bloomberg survey of economists called for 59.1.

“Consumers may agree that inflation will decelerate from the rates we have seen the past few months, but there is considerable uncertainty over how much and how quickly inflation will recede,” Joanne Hsu, director of the survey, said in a statement. 

Recent consumer price data suggest that while US inflation remains extremely high, the worst of it may have finally passed. Though households are still paying higher prices for a variety of goods and services - like food - Americans have recently gotten some respite from widespread price pressures. Gasoline prices, for instance, have fallen steadily since early November.

That said, the path to the Federal Reserve’s 2% goal could prove to be both long and painful, with many forecasters expecting the economy to fall into recession over the next year. Separate data out Friday showed the Fed’s preferred inflation gauge eased in November while consumer spending stagnated.

Buying conditions for household durable goods held steady from the preliminary reading, and Hsu said consumers noted the negative impact of higher interest rates when purchasing big-ticket items like cars and homes.

As the month progressed, the group’s gauge of current conditions deteriorated slightly though remained higher than November’s reading. The measure of future expectations rose. 

An alternative gauge of consumer sentiment from the Conference Board — which places greater emphasis on views of the labor market and was released earlier this week - improved to an eight-month high in December. The group’s gauges of current and future conditions both improved.

In the Michigan survey, concerns about job losses are intensifying. About 45% of consumers expect unemployment to rise in the coming year, the largest share since April 2020, Hsu said.

--With assistance from Chris Middleton.

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