A new report shows that US consumer confidence plunged to a seven-month low in June on continuing worries about high unemployment and stagnating wages.
The Conference Board's consumer confidence index slipped to 58.5 in June, down from a revised 61.7 in May.
'Given the combination of uneasiness about the economic outlook and future earnings, consumers are likely to continue weighing their spending decisions quite carefully,' said Lynn Franco of the Conference Board's consumer research centre.
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.
Economists carefully monitor consumer confidence because consumer spending accounts for 70% of US economic activity.
The consumer confidence index has lost momentum since earlier this year when it hovered between the high 50s and low 60s last year, and then climbed to a three-year high in February, reaching 72. June's results marked the lowest point since December 2010 when the index hit 57.8.
Consumers had been hurt by rising petrol prices in late April and early May, leading many Americans to cut back on spending on other items. But since late May, petrol prices have fallen back.
Signs of turnaround in US house prices?
A closely watched survey shows that US home prices rose for the first time in nine months in April but remained deeply depressed.
Standard & Poor's said its S&P/Case-Shiller Home Price Index showed the first monthly rise since July last year. But prices in the measure of 20 major metropolitan areas were still 4% lower than in April 2010, and were at their lowest levels since 2003.
Prices on the 20-city index were up 0.7% in the month, the first hint of a possible turnaround after housing prices took a second steep plunge in three years last year. On a seasonally adjusted basis, they fell just 0.1%.
S&P's David Blitzer called it 'a welcome shift from recent months', but added that it was much too early to tell if this was a turning point.
