American consumers are taking the political squabbling in Washington over the budget and deficit to heart at the same time as they disdain the partisan culture in the capital.
The University of Michigan preliminary consumer sentiment index fell to 75.2 in October from 77.5 in September. It was the lowest reading since last December. The Bloomberg poll of economists had forecast a median estimate of 75.3.
A poll from Associated Press/GfK found that just 5 percent of Americans approve of the way Congress is doing its job and 83 percent disapprove, 11 percent said they were undecided. Bad as these numbers are, they are not the worst. During the 2011 budget dispute a record 87 percent said they disapproved of Congress. A recent Gallup survey found Congressional approval at 10.5 percent, close to this poll’s all-time low.
Consumer views of the present are slightly more sanguine that their expectations in six months.
The Michigan survey’s measure of current conditions rose to 92.8 from 92.6. The post-recession high was 98.6 in July. The index for consumer expectations in six months dropped to 63.9 in October from 67.8 in September. It was the weakest score since December. The post-recession high was 79.0 last October.
Gasoline prices are usually a good predictor of consumer sentiment but this time they seemed to have been overtaken by the political troubles in Washington.
The nationwide price of a gallon of regular fuel has fallen from $3.67 in mid-July and $3.59 at the end of August to $3.34 yesterday just as consumer sentiment has fallen almost 10 points in three months.
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