Consumer Confidence At 5-Month Low

WASHINGTON (December 21, 2012)--Confidence among U.S. consumers is at its lowest point since July, according to a monthly index released Friday.

The University of Michigan said 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, said 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 at Stone & McCarthy say confidence could fall further if the standoff over the "fiscal cliff" persists into 2013.

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