Confidence among US consumers eased in June from a one-year high as Americans became a bit more cautious about the economy’s prospects, a trend that could affect household spending and the wider economy in the summer.
The University of Michigan on Friday said its preliminary index of consumer sentiment fell from 94.7 in May to 94.3 in June. This month’s drop came after May spike that saw the sentiment index reaching its highest level in 11 months.
“Consumers rated their current financial situation at the best levels since the 2007 cyclical peak largely due to wage gains,” said Richard Curtin, the survey’s chief economist. But “on the negative side of the ledger,” he added, “consumers do not think the economy is as strong as it was last year nor do they anticipate the economy will enjoy the same financial health in the year ahead as they anticipated a year ago.”
The US economy rebounded in the second quarter after a weak start to the year, aided by higher household spending and 1 percent increase in personal spending in April, the largest one-month gain since August 2009, according to the commerce Department.
Still there are signs of a slowdown in the labour market, for instance non-farm employers added just 38,000 jobs in May, while unemployment claims rose last week. On a three month average the economy added 116,000 jobs, about half of last year’s average of 229,000.