The University of Michigan Consumer Sentiment index dropped in June to 74.1 from April’s 79.3. This is is the lowest level so far this year , and lower than expectations for a decline to just 77.5.
The main driver behind weakening consumer sentiment are concerns about deterioration in the jobs market and the euro zone debt crisis.
Shortly before this report, separate data on the Empire State manufacturing index also fell sharply in June. The gauge of manufacturing plants in New York State is one of the earliest monthly guideposts to U.S. factory conditions. The dollar fell as low as 78.60 yen after the report versus 78.70 before its release and down over 1 percent from the day high of 79.49.
Consumer sentiment is seen as a predictor of consumer spending, which accounts for roughly two-thirds of the U.S. economy.
Recent data have shown that there has been a pullback in spending by American consumer. On Wednesday, U.S retail sales data showed a drop for a second straight month after steady growth in the first quarter.