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US consumer sentiment sinks

People carry shopping bags in Manhattan on February 13, 2013
People carry shopping bags in Manhattan on February 13, 2013. US consumer sentiment sank this month after a surge in February, a key index showed Friday, possibly pointing to a slowing of household spending.

US consumer sentiment sank this month after a surge in February, a key index showed Friday, possibly pointing to a slowing of household spending.

The University of Michigan confidence index for early March fell to 71.8 from 77.6 in February, against analyst forecasts that it would rise.

Consumer feelings about both current conditions and expectations of the future were lower, which analysts said could stem from the impact of higher paycheck tax deductions that began in January and the prospect of slashed government spending, the "sequester" cuts, from the beginning of March.

"We suspect the dip reflected a temporary reaction to the spate of news reports highlighting potential sequester effects," said Jim O'Sullivan at High Frequency Economics."

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