Consumer Sentiment Falls

Ann Arbor, MI, December 7, 2007--Consumer sentiment soured for a third month in early December as a housing recession and expensive gasoline left consumers at their gloomiest since the aftermath of Hurricane Katrina, a report showed on Friday.

The Reuters/University of Michigan index of confidence fell to 74.5 so far this month, slightly below analysts' median forecast for a slip to 75.0 and down from 76.1 in November.

Excluding a post-Katrina reading in October 2005, this was the worst reading in 15 years.

The economy has been plagued by a housing crisis that has spread to mortgage-linked financial assets and crippled the credit system, threatening growth.

Reuters/UMich found perceptions of current conditions improved modestly, but expectations about the future deteriorated to their lowest since 1992.

The survey also revealed a widening gap in sentiment between rich and poor. "Additional losses among lower-income households more than offset the gains among upper-income households," said Richard Curtin, who leads the organization's business survey committee.