Consumer confidence fell in June for the fourth straight month as worries about the economy outweighed relief at the gas pump, according to a private research group.
The Conference Board said Tuesday that its Consumer Confidence Index is at 62. That's down from the 64.4 reading in May and the 63.2 analysts were expecting. The index remains well below the 90 reading that indicates a healthy economy — a level it hasn't been near since the recession began in December 2007. But it's far from the all-time low of 25.3 reached in February 2009.
The indicator is widely watched because consumer spending, including major items like health care, accounts for 70 percent of U.S. economic activity. The index illustrates that Americans are worried about hiring, home values, the stock market and a worsening European economy that some fear will hurt the U.S.
"Consumers were somewhat more positive about current conditions, but slightly more pessimistic about the short-term outlook," said Lynn Franco, director of Economic Indicators at The Conference Board in a statement. "If this trend continues, spending may be restrained in the short-term."
Worries about job and income growth seemed to weigh the heaviest on consumers in the index survey, which is based on a poll conducted from June 1 through June 14 with about 500 randomly selected people nationwide.
Those stating jobs are "hard to get" increased to 41.5 percent from 40.9 percent, while those expecting more jobs in the months ahead declined to 14.1 percent from 15.4 percent. Meanwhile, the proportion of consumers expecting an increase in their incomes declined to 14.8 percent from 15.7 percent.
Consumers' dwindling confidence follows a sharp slowdown in hiring in April and May. Meanwhile, a measure of the number of people applying for unemployment benefits over the past month has reached a six month high, the government said last week. That increase suggests that layoffs are rising and June could be another lackluster month for hiring. The government is slated to release June data next week.
Still, Americans have some reasons to be optimistic. A widely watched home price index, released Tuesday, offered some hope for the housing market. Home prices rose in nearly all major U.S. cities in April, according to The Standard & Poor's/Case-Shiller home price index. That's the second straight month that prices have increased in a majority of U.S. cities.
Shoppers also are getting some relief at the gas pump. Gas prices have falling from their peak in early April. Gasoline prices fell 4 cents over the weekend to a national average of $3.41 per gallon, according to auto club AAA, Wright Express and the Oil Price Information Service. And experts say gas could fall another 11 cents by July 4, next week
Despite the positive signs, Americans appear to be hoarding cash. Several companies, from restaurants to home goods sellers, have recently said customers are pulling back on spending in recent weeks unless they are lured into stores by big discounts.
Bed Bath and Beyond last week forecast lower second-quarter earnings than analysts expected and said it needed to use more coupons to get people to spend. At furniture chain Ethan Allen Inc., executives said customer traffic is slowing and shoppers are taking more time to make purchasing decisions.
And Darden Restaurants Inc., which operates Olive Garden and Red Lobster restaurants, expects earnings short of Wall Street expectations, and it said customers were turned off by the $1 increase for Red Lobster's dish "Festival of Shrimp."
Given growing uncertainty about the economy, Michael P. Niemira, chief economist at The International Council of Shopping Centers, trimmed his sales forecast by 0.5 percentage point for June on Tuesday.
He now expects revenue at stores opened at least a year to be up 3 percent to 3.5 percent. That follows a 4 percent rise in May. The figures exclude drug stores. The metric is considered a key indicator of a retailer's health because it excludes stores that open or close during the year.
Major retailers such as Target Corp. and Macy's Inc. will be reporting final sales for June 5.