Consumer confidence in June has eased from a six-year high as progress in the labor market supported Americans’ views of the economic outlook.
Bloomberg News reported that the Thomson Reuters/University of Michigan preliminary index of consumer sentiment declined to 82.7 in June from 84.5 the prior month that was the highest since July 2007, a report today showed. The median forecast in a Bloomberg survey was unchanged at 84.5.
Steady hiring gains coupled with rising equity prices and property values are underpinning Americans’ confidence. Further improvement from the 175,000 jobs added last month may be needed to help accelerate the consumer purchases that make up about 70% of the economy.
“The labor market does seem to be gaining some traction so far in 2013,” Kevin Cummins, an economist at UBS Securities LLC in Stamford, Conn., said before the report. “House prices continue to recover and equity values continue to rise, at least on balance, ahead of the last couple days. That is adding important support to consumption.”
Forecasts in the Bloomberg survey ranged from 82 to 89. The index averaged 64.2 during the recession that ended in June 2009 and 89 in the five years prior.
The Michigan survey follows the weekly Bloomberg Consumer Comfort Index, which slipped to minus 31.3 for the period ended June 9, a two-month low, from minus 29.7. It reached a five-year high of minus 28.9 in late April.