A key measure of consumer confidence in the US fell unexpectedly for the first time in three months in January. The University of Michigan said that its sentiment index dropped to 83.7 this month from 86.7 in December, after rising for two consecutive months from a nine-year low of 80.6 in October. Analysts had expected the index to edged up slightly again in January. The drop in the index indicates that US president George Bush needs to do more to boost confidence among consumers. Last week, Bush unveiled a USD670bn economic stimulus plan, the main element of which involves the abolition of dividend tax for investors, which will cost the US exchequer USD300bn over 10 years.
Just two days after the plan was announced, the government reported that the US economy lost more than 100,000 jobs in December, the sharpest decline in 10 months. There was further bad news for the US in a separate report today, when the Federal Reserve said that industrial production fell 0.2pc in December from November. Economists had expected the output measure of output from factories and mines to rise by 0.2pc. //www.fxcentre.com