By Ruth Mantell, MarketWatch WASHINGTON (MarketWatch) -- As the financial crisis takes its toll, U.S. consumer sentiment dropped in October from the prior month, reaching a record monthly decline, according to the University of Michigan/Reuters index released Friday. Despite falling gas prices, the index fell to 57.6 in late October, compared with a reading of 70.3 in late September. Earlier in October, the reading hit 57.5. Economists surveyed by MarketWatch were expecting a final October reading of 57.5. "Consumer confidence had already declined by mid 2008 by more than prior to any past recession and the steep October loss indicates that accelerated cutbacks in spending can be expected during the months ahead," according to Richard Curtin, director of the consumer survey. A separate reading earlier this week showed that consumer confidence plunged in October, reaching an all-time low in the series' 41-year existence. The UMich data indicate that holiday spending will be the "bleakest" since 1980. "Consumers held the least favorable assessments of their finances in more than a half century and viewed their job prospects more negatively than at any other time since the end of 1980," Curtin said in a statement.

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