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U.S. consumer sentiment hits year low in January

Shoppers make their way through the Walden Galleria mall in Buffalo, New York.

JENNIFER ROBERTS/The Globe and Mail

U.S. consumer sentiment deteriorated for a second straight month to hit its lowest in over a year in January, with a record number of consumers citing the recent "fiscal cliff" debate in Washington, a survey released on Friday showed.

The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment came in at 71.3, down from 72.9 the month before. The index was at its lowest since December 2011.

It was also below the median forecast of 75 among economists polled by Reuters.

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"The most unique aspect of the early January data was that an all-time record number of consumers – 35 per cent – negatively referred to the fiscal cliff negotiations," survey director Richard Curtin said in a statement.

"Importantly, the debt ceiling debate is still upcoming and could further weaken confidence," he said.

The survey's barometer of current economic conditions fell to 84.8 from 87.0 and was below a forecast of 88.0. The gauge hit its lowest since July.

The survey's gauge of consumer expectations slipped to its lowest since November 2011 at 62.7 from 63.8, and was below an expected 65.2.

The survey's one-year inflation expectations rose to 3.4 per cent from 3.2 per cent, while the survey's five-to-10-year inflation outlook was at unchanged at 2.9 per cent.

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