Consumer Sentiment in U.S. Falls More Than Forecast on Rising Joblessness

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U.S. Reuters/U of Michigan Consumer Sentiment Index Fell to 64.6 This Month
By Shobhana Chandra


July 10 (Bloomberg) -- Confidence among U.S. consumers fell in July to the lowest level since March, signaling the economy may take time to pull out of the worst recession in half a century.

The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 64.6, lower than forecast, from 70.8 in June. During the expansion that began in late 2001 and ended in December 2007, the index averaged 89.2.

Unemployment last month rose to the highest level since 1983 while lower home values and rising gasoline costs are eroding Americans’ wealth. The report signals that consumer spending, which accounts for about 70 percent of growth, may remain subdued even as the economy starts to recover.

“The consumer needs to see job losses not just lessening but stopping,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report. “Until that happens, it’s going to keep big chunks of consumer spending at bay.”


http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ0abDG6JQ4w