US consumer sentiment fell in January, with householdsincreasingly worried about a potential war with Iraq and rising joblessness.
The University of Michigan's final January consumer sentiment index fell to 82.4 from 86.7 in December, market sources who have seen the report said today. That was belowthe 83 expected by economists and a mid-month reading of 83.7.
Economists and businesses are paying close attention to consumer sentiment since spending, which drives two-thirds of US economic activity, began retrenching at the end of 2002.
As the Michigan index hit a nine-year low last October, consumer spending in the final three months of last year was the lowest since 1993.
The final current conditions index, which measures how consumers feel about their situation now, rose to 97.2 from 96 in December and its mid-month reading of 96.9. The expectations index, which gauges attitudes about the 12-month outlook, fell to 72.8 from 80.8 and a mid-month level of 75.2.
The University of Michigan's consumer sentiment survey is based on telephone interviews with about 500 households around the country on personal finances, business and buying conditions. The data are released directly to subscribers.