Consumers lack confidence in U.S. economy

NEW YORK – If you’re a U.S. consumer, why would you be confident?

Following a string of bad news that threatens the painfully slow economic recovery, consumer confidence fell to a seven-month low in June on continuing worries about high unemployment and stagnating wages, according to a report released Tuesday by a private research group.

The Conference Board’s Consumer Confidence Index slipped to 58.5 in June. That’s down from a revised 61.7 in May, which marked an almost six-point drop.

“Americans still feel like they’re in a recession,” said C. Britt Beemer, chairman of America’s Research Group. “They feel like they’re driving in a car and getting hit by all sides.”

A reading of 90 indicates a healthy economy on the index, which measures how Americans feel about business conditions, the job market and the next six months.

“Consumers are growing increasingly worried about the near-term economic outlook,” says Mark Vitner, senior economist at Wells Fargo.

Jim Horseman, 55, a railroad engineer from Avon, Ohio, is among those consumers who remain queasy about the economy. He said he needs to buy a new car but is putting it off until next year.

“I’m not giving up my money. I’m holding on to my savings,” Horseman says. “I feel much safer with my money in the bank making no interest than not having it.”

Still, economists had expected the confidence index to edge up because consumers are paying less at the pump. But that didn’t boost shoppers’ mood.

Consumers had been hurt by rising gas prices that neared $4 per gallon in late April and early May, leading many to cut back on spending for everything from televisions to clothes. But since the Memorial Day weekend, gas prices have fallen to a national average of $3.57 per gallon.

The consumer confidence report was issued on the same day a widely watched Standard & Poors/Case-Shiller index reported that spring buying boosted home prices in 13 U.S. cities. But the report also showed that housing remains weak in most of the country.

Americans are most worried about the dismal job market. Hiring has slowed this spring after a strong start at the beginning of the year. The unemployment rate inched up to 9.1 percent last month from 9 percent in April.

The Conference Board survey, conducted by the Nielsen Co., is based on a random survey mailed to approximately 3,000 households from June 1 through June 16. Survey numbers are updated after the month ends.