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October US consumer mood plummets

US house building - Lowest levels since 1991
US house building - Lowest levels since 1991

US consumer confidence suffered its steepest monthly drop on record in October, while building starts on new homes fell to the lowest since 1991 the previous month.

The fall in consumer confidence wiped out a recovery in previous months which was inspired by a retreat in oil prices.

The Reuters/University of Michigan Surveys of Consumers said its index of confidence plummeted to 57.5 in October from 70.3 in September.

Earlier figures showed that construction starts on new US homes slumped an additional 6.3% in September to the lowest level since the recession in 1991.

Housing starts fell to an annualised rate of 817,000. That was down 31.1% from a year ago in the latest evidence of the bursting of the housing bubble that has ravaged the US economy and led to a global financial crisis.

The figure was far weaker than the level of 870,000 expected by private forecasters.

Permits for new homes, a sign of future activity, fell 8.3% to a pace of 786,000 and were down 38.4% from a year ago. Economists said that some of the drop was weather-related but still reflected a weak economy.