NEW YORK, USA – 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, the private research group reported yesterday. That’s down from a revised 61.7 in May, which marked an almost six-point drop.

“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, director of The Conference Board Consumer Research Centre, in a statement.

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 per cent of economic activity.

About two years after the recession officially ended, consumer confidence is still taking a beating. The 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.

Economists had expected the June figure to edge up to 61 as consumers faced lower prices at the pump and inflationary fears dissipated. But June’s results marked the lowest point since December 2010 when the index hit 57.8.

Consumers had been hurt by rising gas prices that neared US$4 per gallon in late April and early May, leading many Americans to cut back on spending for everything from televisions to clothes. But since late May, gas prices have fallen to a national average of US$3.57 per gallon (3.8 litres). And oil prices have declined steeply over the last few weeks, which should eventually translate into even lower pump prices.

Aside from falling gas prices, US economic news has been mostly bad. The consumer confidence report was issued on the same day a widely watched index reported that spring buying boosted home prices in 13 US cities, but it also showed that housing remains weak in most of the country.

On Monday, the Government reported that consumer spending was unchanged in May compared with April, marking the first time in a year that spending hasn’t increased from the previous month.

Moreover, prices in the food aisle remain high and this fall shoppers will be seeing the cost of clothing and accessories rise as retailers grapple with higher labour costs in China and soaring prices of raw materials like cotton. Stores had started to raise prices this spring but only on select items.

But Americans are mostly worried about the dismal job market. Hiring has slowed this spring after a strong start at the beginning of the year. The economy produced only 54,000 jobs in May, the lowest number in eight months. That followed three months in which employers hired an average of 220,000 net new workers each month. The unemployment rate inched up to 9.1 per cent last month from 9.0 per cent in April.