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Imports climb as consumer sentiment falls

November 14, 2009|Reuters

NEW YORK — U.S. consumer sentiment fell in early November amid a grim outlook for future job prospects, while a larger-than-expected trade deficit has economists scaling back estimates for third-quarter economic growth.

The Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for November fell to 66.0, the lowest level since August, from 70.6 in October and well below economists' median expectation of a reading of 71.0, according to a Reuters poll.

"Importantly, the decline in confidence was already in place before the announced increase in the unemployment rate to 10.2% on Nov. 6," the Reuters/University of Michigan Surveys of Consumers said in a statement, adding that "the likelihood that the sentiment index would drift even lower in the months ahead cannot be easily dismissed."

Within the survey, the 12-month economic outlook fell to its lowest since April.

Separately, the government said the U.S. trade deficit widened in September by an unexpectedly large 18.2%, the biggest monthly rise in 10 years, as oil prices rose for the seventh straight month and imports from China increased.

The trade gap grew to $36.5 billion, from a slightly revised estimate of $30.8 billion in August, and added urgency to talks President Obama will hold with Chinese leaders in coming days. Wall Street analysts had expected the shortfall to grow modestly in September to around $31.65 billion.

Both U.S. exports and imports had their best month since December 2008. Imports grew 5.8% in September, the biggest monthly gain since March 1993, while exports rose 2.9%.

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