Confidence among U.S. consumers unexpectedly weakened this month as gasoline prices rose, reinforcing concern about a cooling economy.
Bloomberg reported that the University of Michigan’s preliminary index of consumer sentiment declined to 83.0 from 84.9 in June. The measure has averaged 88.1 since monthly data were first compiled in 1978.
Higher borrowing costs and a slowing housing market are adding to the woes of Americans stung by prices at filling stations. Businesses such as Williams-Sonoma Inc. are bracing for a slowdown in consumer spending that’s forecast to curb the pace of economic growth.
“Some of the factors that pushed confidence higher are beginning to diminish,” said Eric Green, chief market economist at Countrywide Securities Corp. in Calabasas, California. “Equities are starting to perform less impressively, housing prices are flattening out, and employment growth continues to slow.”
Economists expected the Michigan gauge to rise to 85.6, the median of 62 forecasts in a Bloomberg News survey. Estimates ranged from 82 to 89.5.
The preliminary sentiment index is based on a telephone survey of about 300 households. The final report for the month, due July 30, will reflect about 500 responses.