Gauge of consumer confidence at 5-month low
WASHINGTON — Confidence among U.S. consumers has sunk to its lowest point since July, according to a monthly index.
The University of Michigan says its consumer sentiment index for December fell to 72.9, a sharp drop from the November reading of 82.7. The November figure was a five-year high.
Peter Newland, an economist at Barclays, says consumer confidence has dropped because of uncertainty over whether Congress and the Obama administration will reach a budget deal to avert sharp tax increases and government spending cuts set to take effect in January.
Economists at Stone & McCarthy say confidence could fall further if the standoff over the “fiscal cliff” persists into 2013.