Consumer sentiment index falls in June

Optimism among U.S. consumers waned this month as interest rates rose, homes lost value and gasoline prices hovered at or above $3 per gallon, according to the Reuters/University of Michigan Surveys of Consumers released today, Bloomberg News said.
The Reuters/University of Michigan index of consumer sentiment fell 4.6 points in June to 83.7, its lowest since August, as inflation fears rose. A year from now, the survey found, consumers expect inflation to be running at 3.5 percent, up from a forecast of 3.3 percent in May.
The consumer sentiment index stood at 88.3 points in May and 87.1 in April. It had been expected to decline this month, but only to 87.8, according to the median forecast from a Bloomberg survey of 62 economists, whose predictions ranged from 84 to 89.5.
Still, analysts said, so long as wages continue to rise and the job market continues to expand, consumers will continue to support the expansion. “Spending continues to be solid, in spite of higher gasoline prices and mixed readings on consumer sentiment,” Brian Bethune, an economist at Global Insight Inc. in Lexington, Mass., said to Bloomberg News. “The relatively strong job market has kept spending energized.”
The Reuters/University of Michigan Surveys of Consumers is produced each month by the University of Michigan and distributed by Reuters. Additional information is available at www.sca.isr.umich.edu.