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US Consumer Confidence Falls; Trade Gap Narrows


U.S. consumer confidence hit a two-year low this month as they struggled with soaring gasoline prices and falling home values.

Two separate reports Friday on consumer sentiment show sharp declines this month. A report from the University of Michigan said its index of consumer sentiment fell nearly six points (to a reading of 75). A business research group said its measurement fell 16 points (to a reading of 64).

Economists and investors watch consumer attitudes for clues about the consumer spending that drives about two-thirds of the U.S. economy.

The report may be bad news for retailers gearing up for the U.S. holiday season when gift purchases give them much of their annual profit.

A separate government report painted a more optimistic picture of the economy. U.S. exports grew more than one percent to hit a new record high in September, as the weaker dollar made American goods less expensive for foreign buyers.

Friday's Commerce Department report said imports grew less than exports, but were still at near-record levels.

The politically-sensitive trade deficit with China grew strongly to the second-highest level on record.

The total gap between what U.S. companies sell abroad and what they buy from foreigners narrowed six-tenths of a percent (to $56.5 billion).

The trade deficit can stimulate demand for foreign currencies, which is one factor behind the falling value of the dollar. The declining dollar is in turn a major factor in narrowing the trade gap.

Some information for this report was provided by AFP, AP and Reuters.