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News Summary: US consumer confidence fell sharply

The Associated Press

CONSUMER CONFIDENCE: The Conference Board said its index of consumer confidence plunged 8.1 points in January from December to 58.6, the lowest reading in 14 months and the third straight decline.

TAX HIKE: The big drop was blamed in part on the increase in Social Security taxes that took effect on Jan. 1. The increase will mean a household earning $50,000 a year will pay about $1,000 more this year in taxes.

OUTLOOK: Economists said it may take consumers some time to recover from their initial paycheck shock. They worry that the higher taxes could slow consumer spending in the early part of this year.