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To: Johnny Canuck who wrote (40459)	12/12/2003 9:26:55 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69303

U.S. sentiment takes surprise drop Consumer survey falls back from November reading By Gregory Robb, CBS Marketwatch.com Last Update: 10:54 AM ET Dec. 12, 2003 WASHINGTON (CBS.MW) -- Consumers have turned more cautious after deciding that all the talk of an improving U.S. economy may still be just so much hot air, according to researchers at the University of Michigan. CBS MARKETWATCH TOP NEWS U.S. stocks end higher; bulls hold Dow above 10,000 Alliance settlement could come next week China Life rakes in $3 bln in world's biggest 2003 IPO GM soothes Wall Street's pension concerns U.S. consumer sentiment takes surprise December drop Free! Sign up here to receive our SiteWatcher e-Newsletter! TRACK THESE TOPICS My Portfolio Alerts Column: Economic Report Create Get Breaking News sent directly to your inbox Create A Portfolio \| Create An Alert The University of Michigan's consumer sentiment index fell Friday to a reading of 89.6 in early December from 93.7 in November. The decline was unexpected. The consensus forecast of Wall Street economists was for sentiment to improve to 95.6. Stocks fell and bonds rose in the immediate aftermath of the closely watched report. See full story. Consumer sentiment has risen sharply since hitting a 10-year low of 77.6 in March. However, consumers cited fewer gains in wages as the primary reason for concern about their personal financial situation in early December. Growing impatience by consumers for their personal financial situation is typical after an initial surge in confidence tied to a recovering economy, researchers said. Consumers soon begin to wonder when the improving economy will translate into higher wages or a better job. "The data make it clear that consumers are counting on more rapid job growth in the months ahead, and without that growth in employment, confidence will quickly wane," the University of Michigan research team said. As for other data, the current conditions index fell to 93.6 in December from 102.5 in November, while the consumer expectations index fell to 87.1 from 88.1. The decline suggests that retailers may be in for a tougher holiday shopping season than has been widely expected. The feeling that the recovery might be passing them by has made consumers look for discounts, the Michigan researchers said. This price sensitivity comes at the same time that retailers have tried to hold the line on discounts following the rise in consumer confidence seen over the past few months. Greg Robb is a senior reporter for CBS MarketWatch based in Washington.