Consumer Sentiment in U.S. Fell to 10-Month Low in October

Source: Bloomberg

By Ben Schenkel - Oct 25, 2013

Consumer confidence in the U.S. dropped in October to a 10-month low, showing the reopening of the federal government failed to reassure households.

The Thomson Reuters/University of Michigan final consumer sentiment index decreased to 73.2, the weakest this year, from 77.5 in September. The median estimate in a Bloomberg survey called for a decline to 75 compared with a preliminary reading of 75.2.

The government’s partial closing prompted Americans to turn more pessimistic about the economy, whose recovery continues to be uneven. Disappointing gains in employment and the prospect of a protracted budget battle into 2014 raises the risk that consumer spending will cool as the holiday-shopping season approaches.

“This political uncertainty is going to slow any momentum we’ve had in the past few months,” said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York, who projected the sentiment index would drop to 73. “If we come into December without any progress on a funding bill, consumers will start sitting on their hands and that will mean a slower rebound in spending.”

Read more: http://www.bloomberg.com/news/2013-10-25/consumer-sentiment-in-u-s-dropped-to-10-month-low-in-october.html