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NEW YORK (AP) _ Consumer sentiment dropped by an unexpectedly sharp margin as of the middle of October to levels last seen in the fall of 1993.

The University of Michigan's mid-month report on consumer sentiment for October was said to have shown a decrease to 80.4 from 86.1 in September and 87.6 in August. The report is released only to subscribers and is based on a telephone survey of consumers.

Consumer confidence indexes have been under pressure over concerns about financial markets and a possible war with Iraq.

Federal Reserve Bank of Philadelphia President Anthony Santomero, a voting member of the interest rate-setting Federal Open Market Committee, said earlier this week that anxious consumers and businesses are among the biggest reasons that the economy is not doing better.

``The economy continues to grow, but clearly at a pace that is slower than one would like,'' Santomero said. ``We've got enough risks and concerns that suggest it will be a slow recovery going forward,'' he added.

``You have to be worried,'' said Stephen Stanley, senior market economist with RBS Greenwich in Greenwich, Conn. But he added that the confidence number should be viewed ``skeptically,'' given the weak correlation it has with actual spending data.