Consumer Sentiment Index Declines in June

The University of Michigan said Friday that its final June consumer sentiment index declined to 89.7 from 92.1 in May, but that was an improvement over June's preliminary reading.

Economists had expected a final reading of only 87.8, Bloomberg reported, after a preliminary reading earlier this month of 87.2.

In another report released Friday, the Commerce Department said U.S. personal spending rose 0.1% in May, matching the revised increase from the month before. (Click here for the full press release.)

Although sentiment declined this month, it was 12.1 points higher than the nine-year low reached in March during the war with Iraq. Rising stock prices, falling interest rates and a federal tax cut are giving consumers hope, economists told Bloomberg.

The expectations index, based on optimism about the next one to five years, dropped to 86.4 from 91.4 last month. The measure of sentiment on the economic outlook rose in April and May.

he current conditions index, which reflects Americans' perception of their financial situation and whether it's a good time to make major purchases, rose to 94.7 from 93.2 in May.

The index is based on a telephone survey of 500 households.