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VOL. 127 | NO. 251 | Wednesday, December 26, 2012

Gauge of Consumer Confidence Hits 5-Month Low

MARTIN CRUTSINGER | AP Economics Writer

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WASHINGTON (AP) – 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 said confidence could fall further if the standoff over the "fiscal cliff" persists into 2013. And Peter Curtin, the University of Michigan's chief economist for the survey, said the loss of public confidence might be slow to recover even if a budget deal is reached early in the new year.

"Confidence is lost much more easily than it can be regained," Curtin said. "Blaming one side or the other for failure will only increase pessimism as it reflects a dysfunctional system for setting economic policy."

Chris Christopher, senior economist at IHS Global Insight, said the survey showed that "Americans have become increasingly worried over their personal finances, business conditions and the economic outlook."

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 98 376 10,434
MORTGAGES 124 449 13,881
FORECLOSURE NOTICES 14 56 2,766
BUILDING PERMITS 196 798 23,420
BANKRUPTCIES 68 264 8,803
BUSINESS LICENSES 24 77 3,613
UTILITY CONNECTIONS 251 637 13,380
MARRIAGE LICENSES 21 93 3,117

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