U. Mich: Consumer Sentiment Dips Less Than Expected

U.S. consumers were slightly less optimistic about the economy in June, according to a University of Michigan (search) report seen by market sources Friday, as the job market stayed stagnant and a stocks rally faded.

In its final reading of consumer sentiment, the sources said the university's index fell to 89.7 during June, compared to a preliminary reading of 87.2 and May's final figure of 92.1. Economists polled by Reuters had expected, on average, that the figure would slip to 87.3.

The current conditions index rose to 94.7 in June against May's final figure of 93.2. But the future expectations component deteriorated, hitting 86.4 against May's 91.4.

Michigan's gauge was largely in line with a survey released Tuesday by the Conference Board (search), a private New York business group. The Conference Board's index showed that sentiment toward the economy's current state had also waned in June, but consumers were increasingly expectant that the business activity would rebound within six months.

Bellwether U.S. stock indexes surged after the end of the war in Iraq (search) but have stalled recently as signs of an economic revival remain tentative. The moribund labor market has shown no sign of turning around and economic growth has not accelerated sufficiently to create new jobs.