'Devastating' oil prices daunt consumers

Consumer sentiment fell to the lowest level in two years, as rising fuel and food costs strained household budgets. The Reuters/University of Michigan Index of Consumer Sentiment recorded a reading of 76.1 in November, down from a reading of 80.9 in October, and substantially below the 92.1 mark recorded in November 2006. The November level was revised up from a previously estimated figure of 75.0, which was the lowest reading since October 2005. The Index of Consumer Expectations fell to 66.2 this month, down from 70.1 in October. The Current Economic Conditions Index was 91.5 in the November survey, down from 97.6 in October. "Rising prices for fuel and food had a devastating impact on household budgets, and falling home prices have diminished consumers' sense of financial security," said Richard Curtin, director of the Reuters/University of Michigan Surveys of Consumers, in a statement. Households in the lowest third of the income distribution have dealt with the "devastating impact" of high fuel and oil prices, with 60% reporting a worsening financial situation, according to the survey. On the bright side, widespread income gains have meant that only 22% of households in the top third of the income distribution said that they were worse off financially.