U.S. consumer sentiment falls to three-month low due to concerns about tax reform

WASHINGTON, Dec. 8 (Xinhua) -- U.S. consumer sentiment in early December fell to a three-month low due to concerns about tax reform, according to a survey released by the University of Michigan on Friday.

The index of consumer sentiment registered at 96.8 in December, down from 98.5 in November and 100.7 in October, the survey showed.

"Most of the recent decline was concentrated in the long-term prospects for the economy, while consumers thought current economic conditions have continued to improve," said Richard Curtin, chief economist of the survey.

"Importantly, the largest decline in long-term economic prospects was recorded among Democrats, which reflected their concerns about the impact of the proposed changes in taxes," he said.

The Republican-led House of Representatives and Senate have separately passed their own versions of tax reform that would significantly slash income taxes for corporates and individuals.

Congressional Republicans are now working on to reconcile the differences between the House version and the Senate version, hoping to come to an agreement on a final tax legislation before Christmas.

But Democrats and experts have criticized that the Republican tax legislation would mainly benefit the wealth and large corporations.

"The tax bill is tilted heavily towards wealthy individuals and corporations so it is not likely to help the middle class that much," Brookings Institution Senior Fellow Darrell West told Xinhua.

"People of average means will get a small tax cut in the next few years, but then their taxes will go up after that," he said.

The survey also showed Americans expect higher income gains and inflation in 2018.

"The rise in inflation expectations in early December was a surprise, and confidence in this finding must await confirmation in the months ahead before any inferences are drawn," said Curtin. Enditem