Consumer sentiment down to 71.8 in June
Consumer sentiment is down in June on dire jobs reports, falling home prices and ongoing economic uncertainty over the state of housing. The preliminary reading for the monthly Thomson Reuters/University of Michigan consumer sentiment index dropped to 71.8 from 74.3 in May. The index scores consumer sentiment on feedback from 500 different households each month. Analysts at Econoday expected the index to come in at 74.5 for June with a range of estimates between 71.5 and 78.5.The index was as high as 77.5 in February and well above 80 back at the end of 2007, but hasn't been that high since. Paul Dales, senor U.S. economist at Toronto-based Capital Economics, said consumer confidence remains within 65 to 75, as it has since the end of the recession. But it needs to climb higher than the long-run average of 86 to indicate a true economic recovery. "Over much of the last six months, confidence has been held back by the surge in gasoline prices to $4 a gallon in mid-May," Dales said. "Since then, gasoline prices have fallen by 8% to $3.70. But now sentiment is being dented by the 8% drop in equity prices, the further fall in house prices, the weakening in the labor market, and general fears about the health of the overall economy." Federal Reserve chairman Ben Bernanke painted a grim picture when discussing consumer confidence earlier this month. The central bank head said home buying is down as the bleak job market continues to undercut consumer confidence. Write to Kerri Panchuk.