Report: Consumer Confidence Plummets

New York City Reuters and the University of Michigan on Friday released the preliminary results of their survey of consumers for the month of October, showing that the consumer sentiment index fell by more than economists had been expecting.

The consumer sentiment index fell to 57.5 in October from a reading of 70.3 in September, according to the Reuters/University of Michigan Surveys of Consumers index. Economists had been expecting a more modest decrease by the index to a reading of about 65.0. With the decrease, which marked the biggest monthly drop on record, the consumer sentiment index fell to its lowest level since June.

According to the University of Michigan, there have been only four surveys that posted monthly declines of 10 index points or more.

The bigger-than-expected drop in consumer sentiment reflected a deterioration in both consumers' assessment of current conditions and their expectations for the future.

Separately Friday, the Commerce Department reported that construction of new homes dwindled to the second-lowest level in 50 years last month, as home builders sought to reduce the number of unsold inventories in an elusive quest to find the bottom of the housing collapse.