The Reuters/University of Michigan preliminary index of consumer sentiment fell to 83.3, a bigger drop than forecast and the lowest reading since August 2006, from 90.4 a month earlier. A measure of expectations also declined.
Americans turned their attention to the plunge in U.S. stock markets even as a decline in gasoline prices eased a primary worry from recent months. The outlook for household spending may worsen as tighter credit conditions force businesses to curtail hiring, economists said.
``This is consistent with a consumer who's reining in spending,'' said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York. ``We're looking for some softening in the labor market. If companies aren't confident because of what's happening in financial markets, that could make them more cautious about hiring.''
Get us to seeing the following chart, which is the last 6 months of inflation adjusted annual rate of consumer spending at seasonally-adjusted annual rates. It shows a consumer who isn't about to slow his spending, but one who has already slowed his spending. Consumer consumer spending is responsible for 70% of economic growth, this is a big deal.
