US consumer sentiment dips after 4-month rise

U.S. consumer confidence fell this month after four consecutive months of rise, the Thomson Reuters/University of Michigan index of consumer sentiment showed on Friday. The preliminary reading of the consumer sentiment, which records the figure for the first half of a month, declined to 74.5 in December from 82.6 in the previous month, and now stands at the lowest level in four months. The index gauging consumer expectations for six months from now, which more closely projects the direction of consumer spending, edged down to a one-year low of 64.6 from 77.6 in November. The index of current conditions, reflecting Americans' perceptions of their financial situation and whether they consider it a good time to buy big-ticket items like cars, eased to 89.9 from 90.7 last month. The index averaged 64.2 during the last recession from December 2007 to June 2009, and 89 in the five years leading up to the recession. The White House and Congress are negotiating on how to avoid the "fiscal cliff," a combination of tax hikes and spending cuts expected to kick in next year, but so far nothing conclusive has come out. Dampened consumers' moods threatened to weigh on household spending. It is widely believed that the U.S. economic recovery will heavily rely on the rebound of consumer spending, which accounts for about 70 percent of the country's overall economic activity.