Consumer confidence drops from May to June

RISMEDIA, July 4, 2007—(MCT)—Consumer confidence fell in June as high gasoline prices caused U.S. households to rethink or curtail their discretionary spending, according to a study.

The Index of Consumer Sentiment published by Reuters and the University of Michigan was 85.3 in the June survey, compared to 88.3 in May. But it is above the June 2006 reading of 84.9.

“High gas prices have squeezed household budgets, forcing consumers to cut back on other spending, to increase their debt, or to reduce their savings,” said Richard Curtin, the Director of the Michigan Surveys of Consumers, in a statement. “While gas prices have decreased by nearly 25 cents a gallon in recent weeks, gas prices were above $3 per gallon for seven consecutive weeks.”

Michigan pump prices rose two cents overnight to $3.11 a gallon, according to AAA. The national average is $2.97.

Consumer plans to buy homes and cars were on the decline this month.

Meanwhile, lower income families appear to be the most affected by the higher fuel costs.

Copyright © 2007, Detroit Free Press
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