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Last Updated: Friday, 15 February 2008, 16:01 GMT
US consumer confidence plummets
Dearborn truck plant
Sweeping job cuts are worrying consumers
Confidence among US consumers has fallen to a 16-year low, as fears grow about a recession and job cuts, a closely-watched survey has found.

The University of Michigan index of consumer sentiment fell to 69.6 in February, from 78.4 in January.

The report said the index had only been this low during past recessions.

Its findings come a day after Federal Reserve chairman Ben Bernanke warned that the outlook for the US economy in 2008 is deteriorating.

The Fed cut interest rates twice in January in an attempt to boost both consumer sentiment and the wider economy, both of which have been dragged down by the collapse in the US housing market.

'Just horrible'

Ian Shepherdson, chief US economist at High Frequency Economics, said the latest consumer sentiment data was "just horrible".

It's another recession-type reading
Keith Hembre, chief economist at FAF Advisors

"The sustained volatility in the markets, the rise in energy and food prices and, of course, the catastrophe in the housing market, is making consumers extraordinarily miserable," he added.

Separate data on Friday from the Fed showed that US industrial production rose a meagre 0.1% in January for the second month in succession.

Keith Hembre, chief economist at FAF Advisors in Minneapolis, described the latest industrial figures as "ugly".

"It's another recession-type reading," he said.

Other US economic data for January has been equally gloomy.

While the service sector contracted for the first time in almost five years, overall employment levels fell for the first time since August 2003.

Yet at the same time, there was a surprise rise in retail sales in January, which increased by 0.3%.

And a survey of manufacturing activity in New York also produced a gloomy reading.

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