NEW YORK, Oct 11: A moribund job market and punishing stock market losses pushed US consumer sentiment in early October to its lowest level in nine years, raising concerns the consumer-driven recovery could be in jeopardy.

The University of Michigan’s preliminary October consumer sentiment index fell sharply to 80.4 from 86.1 in September, market sources said on Friday.

The drop was far bigger than analysts had expected and brings the index down to its lowest level since September 1993, when the economy was last emerging from a recession.

“There’s clearly a marked erosion in consumers’ feelings about where things are going,” said Carol Stone, deputy chief economist at Nomura Securities International.

The drop was led by a steep fall in the expectations index, which measures attitudes about the 12 months ahead, to a preliminary reading of 72.4, its lowest level since Nov. 1993. That was down sharply from September’s final reading of 79.9.

The current conditions index, which correlates more closely with spending, fell in early October to 92.9, its lowest level since 1992, from 95.8 in late September.

So far consumer spending, which drives about two-thirds of the US economy, has remained robust, in part due to the lowest interest rates and mortgage rates in over a generation. But an earlier report that said retail sales fell 1.2pc in September provided evidence that pace is already slowing.

Wall Street had been expecting a fall in the Michigan index to 85.7. Treasuries briefly popped up after the data were released but then quickly ran into a wave of selling. Stocks were knocked a bit off their highs but then resumed climbing.

The broad US stock market fell to its lowest level in 5 years in early October, pounding consumers’ equity holdings.

“The consumer is coming under growing pressure from the relentless slide in equity prices, weak labour market conditions and the uneasiness over possible war with Iraq.—Reuters