Consumer sentiment index suffers biggest one-month drop since March 2011

“Consumer sentiment took a giant step back in December, as the looming fiscal cliff made its first measurable dent on the public’s psyche,” Steve Goldstein reports for MarketWatch. “The preliminary University of Michigan-Thomson Reuters consumer sentiment index fell to 74.5 from 82.7 in November. That’s far below the 82.0 expected in a MarketWatch-compiled economist poll, eliminating four months of gains and also representing the biggest one-month drop since March 2011.”

“A series of tax hikes and spending cuts, called the fiscal cliff, is due to hit next year unless Congress reaches an agreement to avoid it,” Goldstein reports. “House Speaker John Boehner on Friday said there was no progress on talks. The Congressional Budget Office has forecast the economy to grind to a halt were the full fiscal cliff implemented.”

Goldstein reports, “‘With no clear resolution to the fiscal cliff yet in sight, it appears uncertainty over future taxes are now beginning to have a significant impact on consumer sentiment. Should a resolution be forthcoming, this decline could prove to be a temporary blip, although the longer it rolls on for the more likely sentiment (and possibly consumer spending) is to be further dampened,’ said Andrew Grantham of CIBC World Markets in a note to clients.”

Read more in the full article here.

13 Comments

  1. What do you expect when you have a churlish bunch of obstructionists throwing tantrums in the House and a media that can’t help but whip people into hysteria with terms like ‘fiscal cliff’?

  2. @tclash First… thanks for teaching me the word “churlish.”

    Second, due to the fundamental differences in philosophy on how the country should be run, it has always been this way. If the President is a member of the socialist party while a large or majority contingent of congress is the opposition, you have conflict. The Republicans in Congress are there at the behest of their constituents who for the most part disagree with the policies of this President enormously. While they might seem churlish to you, they are doing what they were hired to do. REPRESENT. They are representatives.

    It was this way when Clinton was in office also. Clinton was held in check by a Republican majority. He was able to do nothing for the most part except sign the legislation they put in front of him, like welfare reform that ironically he continues to take credit for to this day.

    One President that was able to defeat the stalemate was Reagan. He was able to take his case “to the people” on more than one occasion. People called him “the great communicator.” It wasn’t so much his ability to communicate as for once people understood the rationale for the position he took. No one will ever called Barack Obama, a great communicator, more likely (IMO) a great complicator.

    The term Fiscal Cliff has been around awhile. It was most recently resurrected by Ben Bernanke.

    1. Thanks for your well reasoned opinion. As a long time MDN reader who rarely comments, because so much of the conversation turns political, particularly in recent years, I’d like you to know how valuable your articulate, nuanced and well considered views are.

      I’ve just posted a reply to your last post over on G+. Come by and stay awhile, even if the rabid Fandroids cannot be ignored.

  3. Country elects amateur communist president…

    Economy goes into shitter…

    I’m shocked I’m tellin ya… shocked!

    Hahahahahaha… Enjoy the ride to the bottom SUCKERS!

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