Consumer Sentiment Index Plummets Following Katrina

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he University of Michigan’s preliminary consumer sentiment index for September fell to 76.9 from 89.1 in August, the biggest one-month drop since 1980.

The drop surpassed even the post-9/11 decline, Bloomberg reported. The pessimism was enhanced by rising fuel prices and economic concerns over the fallout from Hurricane Katrina.

The median estimate of economists was for the reading to drop to 85, Bloomberg said.

The survey’s current conditions index, which reflects Americans’ perceptions of their financial situation and if it’s a good time to buy expensive items, fell to 97.7 from the final reading of 108.2 in August.

The expectations index, a measure of optimism on the next one to five years, fell to 63.6 following a 76.9 reading in August.

The survey’s final September numbers come out in two weeks.