NEW YORK – U.S. consumers surprisingly turned gloomier through mid-December despite the economy's rebound, throwing some doubt on spending heading into the final weeks of the holiday shopping season.
The University of Michigan's (search) preliminary reading of consumer sentiment fell to 89.6 in December from November's final reading of 93.7, according to market sources who saw the report, released Friday to paying subscribers.
The reading was well below the jump to 96.0 economists had expected and immediately pushed the Dow Jones industrial average (search) below the 10,000 level and the dollar to a new record low against the euro.
The retreat in sentiment comes even as economic growth has boomed in recent months, gradually leading to more hiring, though at a slower pace than in past recoveries. Last month companies added 57,000 workers to their payrolls.
"Given the robust (U.S. economic) data we have seen, we would hope that the consumer would be more optimistic about the current state of the economy," said Lara Rhame, senior economist at Brown Brothers Harriman in New York.
The surprising slide in sentiment threw some doubt on consumer spending during the holiday season, though measures of confidence have had little link to actual retail sales in recent years.
The drop was driven almost entirely by consumers' assessment of current conditions, which fell sharply to 93.6 from 102.5 the prior month.
The expectations index also slid lower, to 87.1 from a final reading of 88.1 in November.
The preliminary survey is made up of about 300 interviews with households at mid-month and then rounded out with another 200 responses at the end of the month.