WASHINGTON (AP) — U.S. consumer confidence fell in June for the third straight month as Americans took a less rosy view of their own finances and became more concerned about persistent inflation.
The University of Michigan’s consumer confidence index, released Friday in its preliminary version, fell to 65.6 this month compared to the final figure of 69.1 in May. The June figure is about 30% higher than the low reached in June 2022, when inflation hit its highest in four decades, but remains below levels generally associated with a healthy economy.
Consumer sentiment has been generally gloomy since the pandemic and particularly after the first peak in inflation, reached in 2021.
Consumer spending is a crucial driver of growth. Low confidence in the economy also influences President Joe Biden’s re-election campaign.
The University of Michigan index rose last winter, hitting a recent peak of 79.4 in March and raising hopes that American consumers would take a more optimistic view of the economy as inflation eased. However, those gains have been reversed as inflation remained stubbornly high in the first quarter of this year.
However, data released this week shows that inflation slowed substantially in May, as the cost of gasoline, new cars and even motor vehicle insurance fell.
The Federal Reserve and economists watch consumer spending closely because it drives most economic activity in the United States. Consumer spending had a good pace in the first quarter of the year, supporting an economy that, in other areas, slowed down during the same period. Spending fell in April after adjusting for inflation, although Americans continue to spend on travel, restaurants, concerts and sporting events.
