Craig Warga/Bloomberg News
Consumer confidence in the U.S. declined in July to a four-month low as Americans’ outlook for the economy dimmed.
The Thomson Reuters/University of Michigan preliminary index of sentiment dropped to 81.3 this month from 82.5 in June. The median projection in a Bloomberg News survey of 68 economists called for a July reading of 83.
Higher prices at grocery store checkout lines are souring attitudes and straining household budgets as they take a bigger bite out of workers’ paychecks. Absent a pickup in wage growth, a higher cost of living raises the risk that consumer spending, which accounts for almost 70 % of the economy, will cool.
“It’s a steady picture, the consumer is optimistic but not getting too carried away,” Sean Incremona, senior economist at 4Cast Inc. said. Higher wage gains would provide “the big boon” for the consumer, he said.