New York, NY, Feb. 13--The University of Michigan's preliminary consumer sentiment index for February dropped to 93.1 from a revised 103.8 in January, according to market sources quoted by Reuters.
Economists, on average, expected a reading of 103.3, according to Briefing.com.
The university's current conditions index, which measures the way consumers feel about the present state of the economy, dropped to 100.4 from a revised 109.5 in January.
The expectations index, measuring consumer's hopes for the near future, fell to 88.4 from 100.1 in January.
U.S. stock prices gave up some earlier gains after the news, but stayed in positive territory. Treasury bond prices rose.
Wall Street pays close attention to consumers, whose spending makes up more than two-thirds of the total economy.
Fueled by tax rebate checks and cash from a wave of mortgage refinancing, consumers hit the malls with gusto in the third quarter, pushing economic growth to the fastest annual pace in nearly 20 years. Those stimulative effects faded in the fourth quarter, and the pace of consumer spending growth slowed down.
But many economists hope that increased hiring this year, along with tax-refund checks in the first half of the year, will help consumers' incomes grow, supporting continued spending.
