US Consumer Sentiment Fell to Five-Month Low in December
U.S. consumer confidence fell in December to a five-month low as Americans grew more concerned about the possibility of higher taxes next year.
The Thomson Reuters/University of Michigan consumer sentiment index decreased to 72.9, the weakest since July, from 82.7 in November. Economists projected a final reading of 75 for December, according to the median of 66 estimates in a Bloomberg survey. Today’s figure was lower than a preliminary report earlier this month.
American households are growing uneasy as the federal government moves toward more than $600 billion of higher taxes and spending cuts starting early in 2013. At the same time, as the world’s largest economy enters the new year, job growth, rising home values, lower gas prices and stock market gains might help boost consumer spending, which accounts for about 70 percent of the economy.
“Sentiment was doing well but reversed because of the fiscal cliff news saturating the headlines,” Jay Feldman, an economist at Credit Suisse Holdings USA in New York, said before the report. “It’s probably temporary. If you resolve the fiscal cliff I’d be surprised if sentiment didn’t bounce back.”