NEW YORK Dec 21 U.S. consumer sentiment slumped
in December as Americans were rattled by on-going negotiations
to avert the tax hikes and spending cuts set to come into effect
in the new year, data showed on Friday.
The Thomson Reuters/University of Michigan's final reading
on the overall index on consumer sentiment tumbled to 72.9 from
82.7 in November, worse than forecasts for 74.7.
It also came in under December's preliminary figure of 74.5.
Talks to avoid the so-called fiscal cliff were thrown into
disarray on Thursday evening when Republican lawmakers failed to
back an effort by House of Representatives Speaker John Boehner
that was designed to extract concessions from President Barack
Economists say the economy could fall back into recession
next year if the changes are allowed to go into full effect.
Record numbers of consumers spontaneously mentioned their
concerns that no resolution would be reached before year-end,
the survey said.
"Even if something is passed in the next week, unless it
includes an extension of the payroll tax holiday, as well as no
increase in income taxes except for the wealthy, consumers are
likely to be disappointed," survey director Richard Curtin said
in a statement.
Of those surveyed, 27 percent said they were concerned about
higher taxes, topping the prior high of 26 percent seen in
August 2011 in the wake of the drawn-out debt ceiling debate.
The barometer of current economic conditions slipped to 87.0
from November's 90.7, while the gauge of consumer expectations
fell to 63.8 from 77.6.
The survey's one-year inflation expectation edged up to 3.2
percent from 3.1 percent, while the survey's five-to-10-year
inflation outlook rose to 2.9 percent from 2.8 percent.
(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)