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Consumer sentiment darkens despite early holiday sales

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Richard Clement/Reuters

(Read caption) Shoppers look through holiday gift wrapping paper at a Wal-Mart store in Alexandria, Va. Not even the trappings of Christmas is lightening consumer sentiment this holiday season.

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Not the approach of the holidays, the rebound in the stock market, or even early "Black Friday" sales are lightening the dark mood of America's shoppers.

Consumer sentiment in November fell unexpectedly to its lowest level in three months, according to preliminary numbers from the Reuters/University of Michigan Surveys of Consumers. The index fell to 66.0 from 70.6 in October. Economists had expected the November figure to rise slightly to 71.0. The index now stands at its lowest level since August.

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The drop was probably precipitated by the rise in gasoline prices and the worsening employment situation, wrote Paul Dales, an economist at Capital Economics, in an analysis. It "supports our view that consumers will remain on the sidelines throughout the economic recovery."

Consumer spending is considered the key driver of the economy. Without it, any economic recovery will be quite weak.

See also:

Black Friday 2009 deals: Will Best Buy or online stores win?

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