June 15 (Bloomberg) -- Confidence among U.S. consumers declined in June to the lowest level this year as the labor market showed few signs of improving.
The Thomson Reuters/University of Michigan index of consumer sentiment fell in June to 74.1 from 79.3 the prior month, which was the highest since October 2007. The gauge was projected to fall to 77.5, according to a median forecast of 66 economists surveyed by Bloomberg News.
A pace of job growth that’s slowed for four straight months and wage gains that are failing to keep pace with inflation are offsetting cheaper prices at the gas pump. At the same time, households may be feeling less wealthy as Europe’s debt crisis roils share prices, raising the risk that consumer spending will stagnate.
“I’m not so sure how much the average American is in tune with what is exactly occurring in Europe,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said before today’s report. “But it is at the front of their minds, because they’re seeing stock values decline and they’re seeing job growth decline and that’s worrisome.”
Estimates for the Michigan confidence measure ranged from 74 to 80, according to the Bloomberg survey. The June decline was the first in 10 months. The index averaged 64.2 during the last recession and 89 in the five years before the 18-month economic slump that ended in June 2009.
Stocks advanced amid speculation central banks will take steps to boost economies as investors awaited Greek elections this weekend. The Standard & Poor’s 500 Index rose 0.6 percent to 1,336.71 at 10:10 a.m. in New York.
Michigan’s reading for June contrasts with the Bloomberg Consumer Comfort Index, which has increased the past four weeks after reaching an almost four-month low in the second week of May.
The Michigan survey’s index of current conditions asks Americans whether they’re better off than they were a year ago and if they think it’s a good time to buy big-ticket items like cars. In June that measure eased to 82.1 from 87.2.
The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, decreased to 68.9, also the lowest this year, from 74.3, which was the highest since July 2007.
Employment growth has waned relative to its pace earlier this year, when it hit a high of 275,000 in January. Payrolls increased by 69,000 in May, the fewest in a year, after a 77,000 gain the prior month. The jobless rate rose to 8.2 percent.