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New Reports Paint Grim Picture of US Economy

Two new reports paint a discouraging picture of the U.S. economy Friday.

A University of Michigan survey of hundreds of households shows the steepest monthly drop in consumer confidence on record in October.

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

Experts blame falling consumer confidence on problems in the credit and stock markets that have hurt the investments that many people had hoped would pay for their retirements.

A separate report from the Commerce Department said the number of new homes under construction fell sharply (by more than six percent) in September to a 17-year low.

If housing starts continued at September's rate for a whole year, just 817,000 new homes would go up.

Officials also said that the number of applications for permits to build homes in the future plunged to a 27-year low.

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