WASHINGTON – Consumer confidence unexpectedly fell in June to a three-month low, adding to signs of a more restrained pickup in the second-quarter economy.
The Thomson Reuters/University of Michigan preliminary index of sentiment decreased to 81.2 from 81.9 in May. The median projection in a Bloomberg survey of 67 economists called for 83.
Elevated fuel prices and limited wage gains are weighing on Americans’ moods and squeezing their pocketbooks even as employers add workers and cut back on firings. Figures released Thursday showed retail sales cooled in May following an impressive three-month run, tempering the outlook for household spending, which accounts for about 70 percent of the economy.
“We need more broad-based improvement in labor market indicators to drive bigger gains in consumer confidence,” Bricklin Dwyer, an economist at BNP Paribas in New York, said before the report. “The implicit tax of higher gas prices is disheartening. Consumer spending will remain somewhat restricted. It’ll take time for things to pick up.”
Estimates in the Bloomberg survey ranged from 80 to 84.5. The index averaged 89 in the five years before December 2007, when the last recession began, and 64.2 during the 18-month contraction.
The Michigan sentiment survey’s measure of expectations six months from now decreased to 72.2 from 73.7 the prior month. The current conditions index, which takes stock of Americans’ view of their personal finances, rose to 95.4 this month from 94.5 in May.
Americans expect an inflation rate of 3 percent over the next year, compared with 3.3 percent in the prior month. Over the next five years, they expect a 2.9 percent rate of inflation, compared with 2.8 percent in May.