Consumer confidence drops more than expected in June

Meanwhile, the Conference Board released on Friday its index of leading economic indicators, which showed an increase of 0.8 percent, more than forecast, in May after a 0.4 percent drop a month earlier.

The confidence survey, which includes a current conditions gauge, a reflection of how consumers perceive their financial situation and whether they consider it a good time to buy big-ticket items like cars, decreased to 79.6 in June from 81.9 the prior month, the lowest level since October.

Consumer expectations for six months from now, a measure that more closely estimates the direction of consumer spending, dropped to 66.8 from 69.5, the report showed.

Gas prices are been steadily dropping through June, with the average price for a gallon down to about $3.68 and the price for a barrel of oil falling below $94 on Friday.

Unemployment has been a persistent problem, with the economy adding only 54,000 workers in May, the fewest in eight months, the Labor Department showed June 3.

Still, corporate executives have said they plan to pick up hiring in the last half of the year, which would not only provide consumers with a confidence boost but help fuel much-needed consumer spending. 

In a separate report released Thursday, Bloomberg’s gauge of economic expectations also dropped to the lowest level since March 2009. 

The weekly Bloomberg Consumer Comfort Index hit its highest level since April as prices improved this month. 

The Michigan survey also showed that consumers are expecting an inflation rate of 4 percent in the next 12 months, compared with a rate of 4.1 percent projected in May.