U.S. consumers cheered by gas price dip

U.S. consumers felt more cheerful in early June as a retreat in gasoline costs alleviated some of their financial concerns, a report said Friday.

The University of Michigan's measure of confidence jumped to 94.8 so far this month from 86.9 in May, according to market sources who saw the subscription-only preliminary June report.

Economists had expected a much more moderate gain, to 89.0.

However, analysts warned that a renewed pickup in energy prices might damage sentiment down the line, now that prices on a barrel of crude oil had soared back above $57.

"The consumer watches the pump price, they are not so aware of the dollars per barrel," said Kurt Karl, head of economic research from Swiss Re. "There is a lag, so the current oil price will be a shock probably about a month from now."

U.S. Treasury debt prices ticked lower after the data.

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Consumer spending accounts for two-thirds of overall U.S. economic activity, and any improvement in confidence is seen as a precursor to stronger growth.

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But the correlation between confidence and retail sales has weakened in recent years, with consumers buying new cars and homes in earnest even as they tell surveys that things are getting worse.

That said, shifts in consumer moods still offer economists some clues to broad economic trends, and the news offered from the latest figures was encouraging.

Expectations for the future also brightened, with that component rising to 84.8 from 75.3 in May, while Americans' assessment of current conditions climbed to 110.4 from 104.9 in May.