Did Consumer Sentiment Fall Off the Fiscal Cliff?
The end of the payroll tax holiday and the possibility of continued political wrangling in Washington over the federal budget have left a mark on consumer sentiment. The benchmark survey, conducted by Thomson Reuters and the University of Michigan, showed that “consumer sentiment unexpectedly deteriorated for a second straight month,” reported Reuters.
Reaching its lowest level since December 2011, the index fell from last month’s reading of 72.9 to 71.3, several percentage points below the reading of 75 expected by economists polled by Reuters. While economists had forecast the survey’s barometer of current economic conditions to rise to 88.0, the gauge dropped to 84.8 from December’s 87.0. The survey’s gauge of consumer expectations also decreased, slipping from 63.8 to 62.7, the lowest reading since November 2011.
The reason many respondents gave for their reduced confidence was the recent debate over the fiscal cliff…