America's consumer confidence waned in June after two strong months of improvement. The sobering report may suggest that the remarkable rise in consumer sentiment in the world's major economies will also slow.
In the US, a widely watched confidence index fell to 49.3 in June, the Conference Board reported Tuesday. In May, the index stood at 54.8. While several analysts had anticipated a drop, because of the robust three-month rally in confidence from February's record low, the decline was more than expected.
It pointed, they said, to a very weak recovery.
"Confidence ... remains at a level consistent with something of a consumer recovery," wrote Paul Dales, an economist with Capital Economics in Toronto, in an analysis. "That said, in a climate where consumers can no longer supplement their incomes with credit and mortgage equity extraction, a given level of confidence may not translate into much extra spending."
If the US economy now moves sideways, can the rest of the world recover?
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