In the currency market, the dollar moved slightly higher against the euro. Late Friday, the euro was trading at $1.3408 vs. $1.3463 on Thursday. The buck held up despite a second straight day of dismal data.

The University of Michigan/Reuters index reported that U.S. consumer sentiment took a huge nosedive in October. The index fell to 57.5, compared with a reading of 70.3 in late September. That constituted a record single-month drop, and was more than twice as nasty as economists’ projections for an October result of 64.5.

“Clearly, this is the response to the market chaos, and it does not look good,” wrote Ian Shepherdson, of High Frequency Economics adding that it’s unlikely consumer confidence will reach levels consistent with rising spending until next year.

In addition, the Commerce Department reported that construction of new homes sagged to the second-lowest level in 50 years last month. Housing starts fell 6.3% in September to a seasonally adjusted annual rate of 817,000, the lowest level since January 1991 and just 19,000 above the all time record low. It was much worse than the 3% decline expected by economists.

Building permits, which are considered less volatile than housing starts, fell 8.3% to 786,000 in September, a 27-year low. Permits for single-family houses dropped 3.8% to 532,000, the lowest level in 26 years.

Housing starts are off 31% in the past year and down 64% from the peak in early 2006, Commerce said.

Source: Dollar ekes out gain against euro -  Consumer confidence plummets. Housing starts at record lows

Last 5 posts by Doug Casey

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