Consumer Sentiment Slips in Early June

FoxBusiness.com ^ | 6/14/2013 | Reuters

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U.S. consumer sentiment retreated this month after reaching its highest in nearly six years in May, a survey released on Friday showed, as household optimism about employment and housing faded slightly.

The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment fell to 82.7 in June, below a near six-year high of 84.5 in May. Economists polled by Reuters had expected it to hold at 84.5 this month. June's reading, however, was the second highest in the last eight months, suggesting Americans were far from gloomy about their long-term prospects. While the barometer of current economic conditions fell to 92.1 from 98.0, a gauge of consumer expectations edged up to its highest since November at 76.7 from 75.8.

Confidence eroded most among lower-income households, which were ``more likely to report worsening overall financial prospects'' than higher-income households, survey director Richard Curtin said in a statement.

But he added that ``all consumers were less optimistic about job prospects in early June, expected smaller gains in the value of their homes and judged the probability of stock price increases somewhat below last month's level.''

The stock market has struggled in the first few weeks of June amid fear that the Federal Reserve might start scaling back its aggressive stimulus program. But the S&P 500 is still up nearly 15% this year, and housing prices in major metropolitan areas have been rising since early 2012.

The survey's one-year inflation expectation rose to 3.2% from 3.1%, and the survey's five-to-10-year inflation outlook move to 3% from 2.9%.