NEW YORK - Consumer sentiment posted a surprisingly sharp fall in early November, hitting its lowest in two years as high energy costs and falling home prices pummeled confidence, a survey released on Friday showed.
The Reuters/University of Michigan Surveys of Consumers said its gauge of consumer sentiment fell to 75.0 from October’s final result of 80.9.
The November reading was well below economists’ median expectation of a reading of 80.0 in a poll conducted by Reuters and was the lowest since 74.2 in October 2005 in the aftermath of Hurricane Katrina.
Consumer sentiment is often seen as a proxy for future spending, which accounts for two-thirds of the U.S. economy.
Consumer sentiment has dropped for the first couple of weeks in November. Consumer sentiment has slowed in September, and October. We also have weak retail sales taking place for October in both big box and luxury stores. What we're seeing here is that consumers are starting to get worried about the economy, and they are cutting back on their spending. Consumer sentiment has been dropping since September (Perhaps even longer). And now we're seeing retailers getting worried about slowing Christmas sales, causing them to slash prices just to move the inventory off their store shelves. I wonder if we're going to see slowing November and December sales, even in the midsts of retailer's cutting prices.
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